this is a follow up question on the offer we made on a short sale. My agent informed me today that the

Asked by home search, Las Vegas, NV Thu Feb 28, 2008

sellers agent had already submitted a shortsale package to the lender for approval however the lender has not responded on that yet. So, we do not know if the bank will agree to do a short sale or foreclose the house. The lender will not accept any other offer at the meantime even though the sellers agent is holding better offer than the initial one presented. Is this normal procedure for the bank/lender? How long is the time frame for a homeowner once at default before the bank will foreclose the house. the time frame banks give before they take the house back. Does it take over a year ? What is the longest time span? Thank you.

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Roberta LaRo…, , Las Vegas, NV
Fri Mar 7, 2008
John, I don't think anything involving the foreclosure process is set in stone, much like the short sale process itself can vary. Yes a mortgage is considered delinquent if not made by the due date. There's some "typical" ideas of a timeline from the Mortgage Banker's Assn.

http://www.homeloanlearningcenter.com/YourFinances/Foreclosu…

Same even with a NOD, the process can be stopped. Normally recorded as rescission, if the owner satisfies the default in the required time or the lender could agree to a forbearance agreement, as examples. Freddie Mac has a PDF PowerPoint about avoiding foreclosures that covers it.

http://www.freddiemac.com/learn/pdfs/service/atf_presentation.pdf

Those are all the typicals, and there's a lot of variables. For anything more exact you'd need legal council to determine what applies in a given situation.
1 vote
Roberta LaRo…, , Las Vegas, NV
Tue Mar 4, 2008
Hi Home Buyer,

Unfortunately there are no set standards with a short sale. Times and procedures are set by the lenders, and while the ball is in their court everyone else involved, buyers, sellers, and agents on both sides are left playing the waiting game for their response. Some happen in a reasonable time, others can take months, even if they reject the offer.

On the default and foreclosure, that also is up in the air. A short sale usually requires the loan be in arrears, but an actual notice of default may or may not have been filed. After the loan is in arrears for 90 days it is considered in default, but the actual time when it is filed will once again come down to the individual lender. Once that notice is issued and the default isn't satisfied, it typically takes around 120 days for the Trustee auction, although it can be postponed.
1 vote
John Brassner, Agent, Las Vegas, NV
Fri Mar 7, 2008
Len, on the NOD, my impression has always been that the lender can file the NOD at any time after the borrower has not paid the mortgage or violated any terms fo the agreement. Even 1 day late. I think the financing agreement defines "default" not state laws. I've been wrong once before, so this could be twice. Can any one point to a regulation to the contrary?
0 votes
home search, Home Buyer, Las Vegas, NV
Thu Mar 6, 2008
Thank you again for the answers. I appreciate your response. This helps me draw a better picture as to how a short sale goes. I will try to extract that information about the owners current status on the house--if he has received the NOD and when--if possible. Thanks.
0 votes
Len McGuirk, , Las Vegas, NV
Thu Mar 6, 2008
Hi Home Buyer,

To answer your question about banks not accepting more than one offer at a time, there are many banks like this. They want the homeowner and the agent to send in the highest and best offer they receive. After the bank has received one offer, they will drag it through the review process and everyone must wait for approval. Many banks will allow the seller and their agent to submit any better offers at any given time, but then the bank will discard the initial offer with no longer review. This can be very common.

Point blank, some banks will only review one offer at a time. Other banks will review multiple offers.

You need to find out if the seller is in default yet. I believe Nevada law gives the homeowner 4 missed mortgage payments before the bank can send out a default notice. The it's about 3-4 months from then that the homeowner has before foreclosure.
0 votes
John Brassner, Agent, Las Vegas, NV
Tue Mar 4, 2008
Hi home search. If the lender were to foreclose, it would take about 4 months from when a notice of default is mailed to the owner. However, that notice may have not been mailed yet and may never get mailed depending on how far behind the seller is on paying the mortgage, if at all. Further, and quite likely, the lender may not desire to foreclose. They usually would prefer to not foreclose on the house if at all possible for several reasons.

No, it isn't normal for a lender to specifically say "don't send me more than one offer." But normal doesn't mean absolute. Is this home your dream home? I like to advise my "value-conscious" buyers to look at bank-owned homes rather than short sales. With a short-sale home you often don't know if they will approve any short sale and you don't know if the list price or lower is acceptable to the note holder until they process your offer. With a bank-owned property, you know with certainty that the seller has the ability and desire to sell it and that the list price is realistic if it hasn't been bid up by mutliple offers.

Good luck,


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John A. Brassner, MBA, Realtor
Windermere Summerlin Real Estate

Cell Phone: 702-808-9816
Fax: 702-995-0488
Email: john@john4realty.com

10777 West Twain Ave, Suite 105
Las Vegas, NV 89135
http://www.NevadaRealEstateCenter.com
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