Home Buying in 92129>Question Details

Bostonjohn, Home Buyer in 92129

I'm currently a buyer waiting for a short sale to go through. Process was opened beginning of December 2009. As of a couple weeks ago news was

Asked by Bostonjohn, 92129 Wed Feb 10, 2010

passed along that we have moved into the Approval phase of the short sale.

Considering the primary is BoA(or Country Wide) would you consider the Approval phase to be Phase 3?

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If your a seller and have a Short Sale in process with Countrywide/BofA this may help you on what to expect. Also, your agent will be working with your lender to do everything possible to expedite that approval…believe me! You may be asked for updated income information on what seems to be a weekly basis…Just remember, the Short Sale is going to help you get a fresh start.

Countrywide has a 3 Phase Approval Process.

Phase 1 – Getting A Negotiator Assigned: This “Phase” according to Countrywide should take 10 Business Days

Phase 2 – Negotiator works the file and prepares it for the Investor: This “Phase” according to Countrywide should take 30 Business Days

Phase 3 – Investor Reviews Offer: This “Phase” according to Countrywide should take 10 Business Days.

The Real Story:

Phase 1-Assigning a Negotiator can take up to 60 Days

Phase 2- Negotiator Prepares Short Sale Package for Investor: Here is where it gets very convoluted…Countrywide swaps out negotiators on files like new moms change diapers! We have had 3 negotiators in ONE DAY! This is a huge problem because Countrywide allows “each negotiator” 30 Days to work the file…before they are accountable to “note” the file. This can make Phase 2 seem endless!

Phase 3- Investor Review/Approval: Real time is about 30 Days.
1 vote Thank Flag Link Wed Feb 17, 2010
Hi,

These only thing we can advise you to do is consult with your agent.

Best to you,

Mark and Kari Shea
Real Estate Experts Serving San Diego County
Specialists in Investment Properties, Foreclosures, Short Sales,
Development Opportunities & Traditional Real Estate
1 vote Thank Flag Link Mon Feb 15, 2010
Bostonjohn: So far you have moved through the process at a good clip, however, I would suggest you NOT rest easy on this. You may not know that there is now what is called a Shared Loss Agreement in place for banks with the FDIC whereby the FDIC will step in and cover anywhere from 80%-95% of the bank's loss in a foreclosure. The loss is calculated using the ORIGINAL LOAN BALANCE, not the amount that the bank paid for the loan. Depending on the amounts owed on any given property the FDIC could conceivably step in and cover anywhere from 80%-95% of the loss. Taking advantage of this new program, it can be FAR more lucrative for a bank to not even deal with short sales or loan mods and just let the property go to foreclosure. (especially AFTER the BPO is done when they get a true sense of what its worth is on the current market) Being WHO B of A is: I would guess that they may be one of the banks that can do this.
There is actually a chance that they will turn you down and go to foreclosure. If they do, you can wait around for 2-3 months in the off chance that you will see it come back on the market as an REO. You may get lucky and the numbers could work out for B of A to go forward with the short sale. This is just ONE MORE of many added risks for buyers when they try to buy a short sale property... If it works out, it can be great... if it doesn't and the interest rate and/or home prices have gone up during that time, you may price yourself out of the market altogether. Only YOU can determine if all the risk is worth it to you.... Good Luck!
Web Reference: http://EllenHayesHomes.com
1 vote Thank Flag Link Wed Feb 10, 2010
What does it mean moved into a approval phase? To be honest with you, to me the approval phase starts when you receive a letter of lender's consent or a short sale approval. As Jacqueline mentioned there are not exact phases, but landmarks, let's say when you know that process is moving along. One of those landmarks is ordering a BPO and assigning a negotiator, the last one would be getting the letter of approval.
I wouln't assume anything you hear verbally is the fact until you get the letter in writing. I've had too many times listing agents promised me they have or almost have SSA, when they didn't for months yet to come.

Sincerely, Khrystyna Chorna
Prudential California Realty
619.808.7064
1 vote Thank Flag Link Wed Feb 10, 2010
Unfortunately there are currently no standard time frames or phases for short sales. I have a number of short sales in escrow as a sellers agent and several others in process as a buyers agent....every one of them is different.

I recommend you ask questions to see if you can get more information from your agent, but understand that s/he may not be getting questions answered from the sellers agent......there are some that are on top of the process and have regular communication with the lenders and their are some that just submit offers and then wait.

I advise all my Buyers that short sales are the most difficult way to purchase property in this market, at the current time. Maybe that will change once the HAFA guidelines take effect (see my blog on this topic)...or maybe not. You can get a great deal if you are willing to stick with the process and move on to the next home if the sale does not end up getting approved or another buyer is chosen.
1 vote Thank Flag Link Wed Feb 10, 2010
ITS sad your asking strangers instead of your agent
0 votes Thank Flag Link Wed Mar 10, 2010
It sounds like you are making great progress. You are fortunate. I hope the process keeps moving and you soon get a favorable answer from BofA and Wells. Be ready to move quickly when you get an approval. Lenders take a long time arriving at an approval for a short sale and then they expect the buyer and seller to move quickly to close…often with daily penalties if you don’t close escrow on their time table.
0 votes Thank Flag Link Wed Feb 10, 2010
Based on feedback from the listing agent, the BPO was completed in December, and all negotiators were assigned and have the required documents including the appraisal results. I should have mentioned Wells Fargo is a secondary lender on this short sale. Wells Fargo has been very quick assigning a negotiator right away and essentially waiting for BoA to start working on it.

I understand a short sale is a risk and may never close, but i'm highly encouraged by the progress to date especially since a lot of activity happened during the holiday's when most business activity goes dead.
0 votes Thank Flag Link Wed Feb 10, 2010
That is actually very good progress! You should ahve an answer in a couple of weeks. BOA has moved to a new system, and things are happening faster. Good luck!
Let me know if I can help you in any way!


Joan Wilson (Realtor, SRES, Ecobroker)


California Cool 4 Sale
Prudential California Realty
Direct Phone: 760-757-3468
Fax: 760-946-7894
JoanWilson@prusd.com
License # 01341483
0 votes Thank Flag Link Wed Feb 10, 2010
The fact that you've moved along at all in such a short period of time is remarkable. I have buyers who have been waiting on progress for over 6 months.

Until you get some verbal requests from the listing agent via the negotiator, you won't know where you're at. Once you get requests, you're a step closer to the actual counter, and then finally you'll move fairly quickly.

Congratulations. Hang in there.
0 votes Thank Flag Link Wed Feb 10, 2010
Have patience with short sale approvals and loans. This takes months to move through. The banks are over loaded with short sales. Good Luck.....
0 votes Thank Flag Link Wed Feb 10, 2010
hi BostonJohn, As Scott mentioned, the process is not as simple as 3 phases and since you are dealing with a short sale that has 2 loans, the process can extend if the second lender does not cooperate (hopefully is not your case). Be patient because there are a lot of variables in the equation; be prepared and if the home your going to buy is really what you want; just wait for the seller side to finish their approval side. Best case scenario 3-4 months from when the package is submitted. Best of luck
0 votes Thank Flag Link Wed Feb 10, 2010
Well country wide is 1 of the 2 worst to deal with. The process is more than just saying 3 phases. First the listing broker should have gathered the sellers financials and hardship letter, when an offer comes in, the offer is submitted with the sellers financials, offer , copy of teh deposit and copy of teh buyers preapproval as well as any forms the bank requests for a short sale. Within 30 days the bank will assign a negotiator, the negotiator will review the package, ask for anything missing and order usually a bpo and sometimes a formal appraisal. Once that comes back the negotiator will send their findings to teh asset manager for approval. Usually 30 days from when the negotiator was assisgned. The asset manager will then reply to teh short sale by accepting, denying or making a counter offer to the listing agent. If acceptable the short sale forms must be signed usually quickly by the buyer and seller and returned. The short sale papers will outline what they will accept and how auickly they are requiring it to close. usually within 21 days of teh approval of teh short sale. I hope this helps
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Wed Feb 10, 2010
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