Is their legal actions a seller can take if they are not approved for a short sale and should qualify?

Asked by Johnjmiranda, Santa Ana, CA Mon Aug 23, 2010

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Tracey Martin, , Salinas, CA
Tue Aug 24, 2010
Unfortunately a short sale is not a right. It is up to the investor who owns your loan as to whether they will allow it. Some Investors just don't do short sales. Before you do anything, call your servicer and find out who owns your loan and ask if that investor participates in short sales. If they have approved other short sales then, as others who have answered your question have said, you may want to contact an attorney. Although, I think you should contact your U.S. Congressman's office first, to see if they can help. They will help you for free ( your tax dollars pay for their help.) I have found our local U.S. Congressman's office very helpful in getting a positive outcome for my clients.. Before you contact anyone make sure you have all your documentation ready. You should have all of the correspondence from your lender/ servicer and everything you sent to them to verify your hardship. I would ask your Realtor for a market analyzes for your property and their notes on the contact they had with the lender/servicer. Gather anything you have to support your argument that your short sale should have been approved. Make an appointment with an aide at your Congressman's office and bring everything you have support your argument that you should have been approved. If they are unable to help, then take it to an attorney. However, you have to remember that lenders/servicers are encouraged to do short sales, but not required. Good luck to you.
0 votes
Lyle Wolf, Agent, Morristown, NJ
Mon Aug 23, 2010
If you are not approved for a short sale, you realistically have 2 next options:

1.You can have a Forensic Loan Audit done. There is always the possibility that it will show one or more violations of federal lending laws (from lack of proper disclosure to fraud). In this case there can be unpleasant consequences for the lender and you have better leverage to force a short sale.

2.If you feel the offer is a good one and the loss mitigator was unreasonable you can escalate the file by sending it to the CFO or CEO of the lender with your explanation of why this is in the best interest of the lender to approve. Be careful not to trash the loss mitigator.
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Jayne Vaughan, Agent, Clarks Summit, PA
Mon Aug 23, 2010
I'd go one step beyond what Anna said, look for a Real Estate Attorney that has worked successfully with other short sale clients.

Good Luck

Jayne Vaughan
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Anna M Brocco, Agent, Williston Park, NY
Mon Aug 23, 2010
Not knowing all the specifics of the situation--what is your agent suggesting--for any legal questions, your best source of advice is an attorney who specializes in real estate, consider a consultation--most professionals do offer a free consultation and if you cannot afford an attorney contact your local Legal Aid Society.
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Steven Ornel…, Agent, Fremont, CA
Mon Aug 23, 2010
Hi John,

You are asking a legal question so you should really speak with a Lawyer about this. However, I believe Lenders are NOT obligated to take less than what has been contractually agreed.

-Steve
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Jason Stevens, , Englewood, FL
Mon Aug 23, 2010
An attorney would be your best portal for this question. However my opinion would be no. A short sale request is not something that a lender would be legally required to do. I'm sure no where in your mortgage papers does it state that your lender has to approve a short sale, should the situation arise. Actually a short sale is a priviledge (compared to a foreclosure) that your lender would be extending to you. By no means is it something your lender is legally required to do. Good luck
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