My husband and I missed out closing date on a short sale due to a mistake made by the listing agent. She did not get written approval on the 2nd

Asked by Hopeful In Corona, Corona, CA Mon Nov 9, 2009

mortgage. She only got a verbal approval on 9-1-09. The day before closing the escrow company called asking for the written approval and thats when we found out she did not have it. The listing agent asked for an extension from the 1st and we still dont have that in writting. The 2nd mortgage said they sent out the file over the weeend for final signatures and to check back on Wednesday. My question is, if they already approved it why cant they just type up a approval letter. Also once it gets sent to the invester what do they have to do before they can sign off it and how long does that take. The 1st verbally said we have until the 20th of November to close. If it helps the 1st is Midland and the 2nd is GMAC.

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x, , Hawaii
Mon Nov 9, 2009
Sorry to hear you are having these types of problems. I am sure you have been very patient only to get this far and still have delays.

I am afraid that you need to get your information from your Realtor. The rest of us would be overstepping our bounds by giving advice to another Realtors client. Especially since we don't know the whole exact story because we were not involved. Your agent and their broker should be able to advise you.

Maybe a lender will see your question and be able to advise you.
1 vote
Cal, Home Seller, Oregon
Wed Aug 24, 2011
Having just gone through a short sale (ALMOST done, price approved and buyer initiated closing), I would say listen to Harold Sharpe here. He truly tells it like it is! It's the most honest assessment of this situation I have ever read. We all got ourselves in this mess, it's not the bank's fault, it's not the realtor's fault and despite all this--they are all trying to help us. You need LOTS of patience to go through this process. Things can look great one day, horrific the next and back to good the day after. Try to maintain your calm and say the mantra "it's all going to work out", over and over.....and somehow it really does. The realtor is the hardest working and least rewarded party in this sure to treat them with respect and thank them profusely! The only additional advice I would offer is keep your documents in order (yes you will send them to the bank over and over...and over!) and keep a journal of who you talked to, what papers you sent, dates, times, etc. It really does help. Missing any deadline dates is not a good idea, but sometimes things get lost in the shuffle between the bank, realtor and home owner. Don't panic, call the bank, explain, and ask (beg?) for their suggestions and help.
0 votes
Harold Sharpe, Agent, LAKE HAVASU CITY, AZ
Fri Jan 8, 2010
Hi Hopeful in Corona,
Short sales are each unique.
While your agent is negotiating for you and dealing with the stress of dealing with the worst element at the bank, you need to know a few things.
First and foremost. not all short sales are approved. In fact of all the short sales listed, only 12-20% actually sell.
Second on the banks end,.... while all may be set and ready to go. each file processor handles approx 400 - 600 files at a given time. Oh by the way those people at the bank, quit their jobs as often as you wash your car. There is no faces on a file. They can't remember who is what and so on. In addition their bosses at the bank are not what anyone would call nice. They don't get hired to be nice and they don't keep their job if they are nice. This is not a bank teller position. This is a Collection department dealing with hundreds of people wanting to default on their loans or pay less than is owed. Those same bosses get paid on commission of money they collect over and above a certain number and or percentage.
While I know you are trying to sell your house, I understand your crisis. But as a person who is getting let off the hook for thousands upon thousands of dollars, you job to earn that is to put with crap from those who may let you off the hook for all of that money.
I ask you in the back of your mind to remember how you spent your refi money or second money. You may have paid off credit cards for many purchases in your home. You may have bought that SUV, or a boat awhile back. You may have sent your kid to college. You may have bailed out a family member out of jail. But it is truly amazing how mad people are at the banks, when the banks loaned you money for the promise you would pay them back with interest. Now I ask you to keep in mind you spent alot of money. and you are trying to short sell your house. You are doing the right thing by not letting it go to foreclosure. I hope you agent took the time to tell you, "This is a long process, it is in an effort for you to get away with thousands and thousands of dollars which you promised to pay." "I hope you will understand that many things can go wrong." "I want you to know, I will try my best." "I cannot guarantee that the bank will settle your debt." "However I will try, and I am trained to do this." "If it is successful, a short sale should help your credit out in about two years as opposed to a foreclosure putting you into financial ruin for 10 years, and you may be let of the hook for thousands upon thousands of dollars." " I will be working my ass off calling these banks 2-3 times a week, being on hold for no less than an hour each time." " I will have faxed every bit of your file to them at least 3 times." " I will have mailed it to the bank no less than twice." " I will have emailed your file 7 times." "Now double all of that cause you have two loans." " I ask for your patience and kindness along with common decent respect." " I do this for a reduced commission and the satisfaction of helping out a family and sticking it to the bank." " Now would you like to proceed with your short sale?" This is what I tell people upfront. They need to know the cold hard truth of what I am doing and I take the time to let them know. If they can't handle it when I let them know the truth, then they are not ready to steal thousands of dollars from the bank and have me help them get out of the messed up situation that they are in.

I hope you can laugh at this and look at the seriousness of it as well.

I am not this way usually, but when you negotiate with banks, you know you have to be ready to stand your ground to do your best for your client.

I wish you and your loved ones, the very best.

Harold Sharpe
So Cal Homes Realty
951 821 8211
0 votes
Lydia Kray, Agent, Corona, CA
Tue Nov 10, 2009
Hi Hopeful
I agree completely with Linda, these are questions for your Realtor since your Realtor knows the full story.

Lydia Kray- Realtor
Tarbell Realtors
cell 951-733-1058 :)
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0 votes
Elise Timpe, Agent, Corona, CA
Mon Nov 9, 2009
Your situation is not unusual. Realtors are powerless to ensure the processing on a short sale. We are at the mercy of the banks. I have a collegue that is anticipating an approval, finally, on an offer made a year ago. My husband just completed an appraisal for a short sale that was started in June.

Another stumbling block in the process is that communication between bank loss mitigators and Realtors is often sorely lacking. Most Realtors have no idea exactly what the loss mitigator is or isn't doing at any given point. The only thing we do know is that they are very busy and often don't return calls or messages. If we "bug" them too much, it can be as counterproductive as not following up enough...a fine line.

It's like the "Wild, Wild, West". The territory is still largely "uncharted" and there're no hard and fast rules. the best that any Realtor can do is to let you know ahead of time that this is the way Short Sales are. A few go through relatively smoothly, some can take over a year to complete, some are somewhere in between and some never close at all.

If it helps, GMAC was the lender on my smoothest Short Sale listing sale. It sounds like the wheels are turning which is good news.
0 votes
Connie Bramb…, Agent, Rancho Cucamonga, CA
Mon Nov 9, 2009
Hello Again Hopeful,
It seems it was about a couple of weeks ago you wrote about finding out the 2nd was not approved in writing. As you can see from the very fact that the second sent the file out over the weekend the banks really drag their feet on these short sales. It is very unfortunate that the 2nd did not package this sooner; but the truth is no one can really tell you when this will get done at this point in time. You really do just have to wait. It seems as though you have everything in place to close . What I do not understand is why you got this far with no written approval! I hope YOUR new lender does not try to charge you for anything if this does not close. Hopefully you paid no up front fees them. Right now you need to speak to your agent and make the priority be getting the extension in Writing from the 1st. The 20th is only 11 days away and the way banks move, you stand a good chance of not having that 2nd in writing.
Also make sure your new lender is totally ready as you are really coming down to the wire here. I really hope this works out for you!
To answer directly, the 2nd is only approved in one department. That is why it has been sent out for review and final written approval. Someone will type up the approval letter, but it will be after it reaches the next level.
Do not be shocked if you are asked to contribute to the 2nd, as they may think they have you over a barrell. Try to hold out and get the approval, if the 1st forcloses the 2nd gets nothing, don't forget that; and give in to idle demands; without a fight!
When short Sales go this long it is easy and almost expected for a buyer to look somewhere to put blame. The truth is; IF you close escrow, both agents did an exceptional job. If you do not close it doesn't mean they did something wrong, just the way things happen. I know you can ask for things over and over until you are blue in the face and not get a response, just gotta keep going! Sit tight and wait it out. Take a deep breath and know that everything is as it should be, and You are exactly where you should be. I believe things have a way of working out for the best, it's just sometimes we can't see that so easily!
Connie Bramble
Prudential Ca Realty
0 votes
SeattleHome.…, Agent, Seattle, WA
Mon Nov 9, 2009
Linda's right, you should be asking your agent these questions directly.

As to the general questions about short sales and lender timelines for responses - there are none. It's sad, but they get back to you when they get around to it. Could be 3 days, could be 3 weeks. Many of the folks at the bank working on files like yours also have their regular full-time job to get done. If they get around to short sales and REOs once a week, whatever they can get done in committee gets done that day. Everything else gets shelved for a week.

It can be very frustrating process for buyers, and they should be made aware of that before diving into distressed property purchases.
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