Home Selling in 90033>Question Details

Amanda, Home Buyer in Los Angeles, CA

My cousin's house is in a short sale for several months and she he is waiting for the lender's approval.

Asked by Amanda, Los Angeles, CA Tue Jul 28, 2009

His agent said that it might go to foreclosure by August. Is it possible for that property to be foreclosed whereas a decision for short sale approval is still pending?

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Emily Knell’s answer
It is possible the bank will let it go to auction. However most banks WANT to avoid foreclosure because it costs them more money to take it to auction, in which case 80% of those homes end up going back to the bank, then they have costs to hold the property, fix it up if necessary etc. The bank would MUCH rather sell the home as a Short Sale.

The listing agent CAN request (Strongly) that any auction date be postponed, the listing agent MUST be aggressive about this as the Aug. auction date is soooo close!

0 votes Thank Flag Link Thu Jul 30, 2009
This scenario is very possible. First of all your cousin must be aware that the foreclosure department and short sale department are 2 different departments that do not communicate. If the foreclosure is set for August, depending on the bank your cousin has their loan with they have different rules to postponing the foreclosure. For example some banks as you to call them 5 days prior to the foreclosure to postpone the sale and other have the negotiator postpone the sale.

Even though your cousin has an agent handling the short sale, they can still contact the bank to make sure the sale will be postpone.

If you have any other questions feel free to contact me alexandrasellshomes@yahoo.com or direct # 323-482-0705

Thank you.
0 votes Thank Flag Link Tue Jul 28, 2009
Foreclosure is a process that underlies most short sales. In my experience if there is a viable offer the lender will postpone actual foreclosure. I am working on one right now where foreclosure has been postponed already twice while I am trying to get all the participants together to close.

I do call the loss mit department and ask whether there is a scheduled date for doreclosure. Most of the time they tell me no foreclosure date is set yet. That could of course change any time but I have always found lenders willing to hold it while I had an offer in front of them.
0 votes Thank Flag Link Tue Jul 28, 2009
If the real estate agent does the job right then it wont go to foreclosure.
The bank should look at multiple offers that you have and normally it will take them up to 2 months to make a decision.
They will tell you on the phone that your property can go to foreclosure, but in reality they will not forecloe on you.

Wait a little longer, It will happen
Web Reference: http://homesinsale.com
0 votes Thank Flag Link Tue Jul 28, 2009
The agent who proposed the short sale should have a large packet of information that explains why it is in the loan company's (and owner's) best interest to accept a short sale. The agent should be selling negative. Things like, costs to go through foreclosure verses accepting an offer. Because an offer was sent in for a short sale, the loan company doesn't have to accept it and can foreclose.
0 votes Thank Flag Link Tue Jul 28, 2009
Your agent should call the lender and let them know that there is a complete file pending assignment to negotiatior and you would like to put a hold on the sale date till there is a response. Most lenders will do this when it is there backlog holding up the file. Your Agent better make sure they know what they are doing a provide a completed file or worst case senario; they will go ahead and sell it regardless of short sale request or not. Hope that helps good luck. For a guaranteed short sale approval with proven track record please call for a free consultation. Trinidad Remax 909-348-0471
0 votes Thank Flag Link Tue Jul 28, 2009
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