Home Buying in 90713>Question Details

Melissa, Home Buyer in 90713

How can a bank (WAMU now CHASE) will modify or give the seller a chance to modify their loan since the seller?

Asked by Melissa, 90713 Sat Aug 8, 2009

has never paid the property mortgage for 16 mos. ( oh not to include the ppeoperty tax too). Sounds like the seller has the power to do what they want, and now the bank will just let this irresponsible seller to live in the property for free again? It so ridiculous and stupid how this things work, here we are a qualified buyer and responsible payer and now we are not giving a chance. Should we contact a real estate lawyer? The bank has already accepted our offer since the very beginning we waited so long Please advice me the most convenient answer for my peace of mind. I know the other option is to do a double escrow but we are positive and hoping that the bank and the seller will come into their senses? I just want to find out what's the best thing to do to have this property done and we'll go on with the process...SUCH A SHAME IN THIS MARKET TREND

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Dear Melissa,

I sympathize with you entirely. You are in the "piggy-in-the-middle" here. A few key factors to keep in mind.

1. Banks have huge pressure on them to "work-it-out" with the owner if at all possible. They don't like negative pr. The owners will have to show the bank that they have a secure income source. They must prove they are able to make the payment, if the bank does modify this loan. You are not in the loop usually to know if they financially can do this....

2. With this being said, some banks will add up all the past payments and place them on the rear of the owners loan...so they will pay in the future. They will tack on past due taxes etc to that and then the sellers mortgage balance increases by these amounts.

Each situation is v. unique and without knowing all the circumstances or challenges or inside info.....it's impossible to know whether the bank will or will not grant this loan modification for the seller. If you did write your offer using a "short sale addendum" it does pass comment on many of the "challenge" facing you as a short sale buyer. It's an experience for you to attempt to buy one..and you will have gained a lot of knowledge in this process.

Hopefully you are not out of pocket too much and ultimately it may work out in your favor.

Keep educating yourself, and keep your fingers crossed!!!


Yvonne Kelly-Brazell
Prudential California Realty
(*Text or Call me: 562-201-1230)
0 votes Thank Flag Link Sat Jan 2, 2010
I agree with Jenny in the first response. While all of your points are good ones, the fact that the seller can change his mind is one of the greatest risks of the short sale. It hasnothing to do with how well-qualified you (the buyer) is, but the property still belongs to the seller until it is sold (either to another party or in foreclosure action).
0 votes Thank Flag Link Sun Aug 9, 2009
My "peace of mind" answer to you is ... find another comparable home in the same area and move-on.

I would hate for you to miss the $8,000 tax credit (and the CA $10K tax credit for new home purchase) if you don't close by the end of the year while waiting for this property as it could take up to a year or may be longer for a final decision from the bank.

The homeowners have responsibilities, they do not have the power to do anything they want, especially when they are in default. There are real estate laws where all parties have to adhere to.

Please don't get too attach because the whole process of shortsale or REO purchase is very time consuming. All banks have the obligations to exhaust all possibilities to keep the current homeowner in their home. The homeowner has upto 5 days before the auction date to cure the past due issues. The timeline to auction date is upto 4-6 months subject to many unforseen delays which then could lead to +1year.

You should know that "Wamu now Chase" means a tremendous amount of potential delays because the loan may not have an assigned asset manager. No one is paying any attention to the loan, thus the delays you're experiencing. The current homeowner is reaping the benefits of Wamu being acquired by Chase. Bank acquisitions always result in delays.

The shortsale and/or REO processes are not complex at all. They are quite simple. They both require a lot of phone calls, direct follow up (emailing won't work.)

The winner is the one with the most patience.
0 votes Thank Flag Link Sat Aug 8, 2009
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