Posts Tagged ‘Bank of America’

A Wachovia Short Sale is the New Real Estate Heaven

Wachovia Short Sales Are Far More Superior than Any Other Short Sales

As a Real Estate Broker in the trenches who hears and experiences a lot of short sales horror stories each and everyday, when we closed our first Wachovia short sale, we thought we all had died and gone to Real Estate Heaven. When the manager of the short sale department for Wachovia first came to my office to talk to me about Wachovia’s short sale program. It was hard for me to believe his pitch because it sounded way too good to be true.

The truth is Wachovia takes the pain out of short sales for everyone involved in the transaction. Wacovia is a portfolio lender, meaning it made its own loans and is responsible for deciding whether to approve a short sale. Other banks such as Bank of America, CitiMortgage, Chase or Wells Fargo generally have to submit the file to their investors for approval. Depending on the guidelines those investors follow, the process can be complex, lengthy and or produce ridiculous demands that cause short sales to be rejected. Not so with Wachovia!

How Banks Other than Wachovia Handle Short Sales

First, to truly appreciate a Wachovia short sale, it helps to look at the short sale process adopted by most major banks. Once you realize what hell those banks put a seller and buyer through, you’ll understand why Wachovia is special.

Here are some of the problems with other short sale banks:

  • The worst problem is it takes too long. Buyers get tired of waiting for short sale approval and cancel their purchase because banks can’t process their short sales fast enough. It can take a minimum of 6 weeks to 6 months or longer to get short sale approval.
  • Banks require a ton of paperwork from the sellers. They generally want their last 2 years of tax returns, W2s, payroll stubs, completed financial statement, bank statements, hardship letter, in addition to a slew of documentation from the listing agent.
  • Some banks demand seller contributions, even on California purchase-money loans. Purchase money loans in California are typically exempt from a deficiency judgment in the event of a foreclosure, but to grant a short sale, the banks may demand money from the seller.
  • Often, when there are two short sale loans, the two banks fight over how much the second bank will receive. Some second lenders try to push sellers to commit short sale mortgage fraud. It’s a nasty situation all the way around!
  • By the time the short sale finally closes, the sellers often feel broken down, beat up and battered. They wonder why they even tried to do the right thing by choosing a short sale over a foreclosure. And even after closing, sometimes the bank’s departments are so confused that the short sale department forgets to notify the foreclosure department that the transaction has closed, and the bank files foreclosure anyway.

How Wachovia Handles a Short Sale

With Wachovia, it’s like opening the door at the train station in Venice and discovering the Grand Canal is at your feet, looking just like a picture postcard. Like Dorothy in Wizard of Oz, leaving her black-and-white world and entering the colorful Land of Oz. It’s like eating chocolate for breakfast.

Before rendering an opinion on the short sale, Wachovia asks for basically 3 things:

  • The buyer’s and seller’s signed purchase offer.
  • The buyer’s preapproval letter and proof of funds.
  • The seller’s listing agreement.

A representative from Wachovia will either call or visit the seller at home to discuss the seller’s financial situation and appraise the home. If there are two short sale lenders, Wachovia knows how much the second lender is likely to accept and offers that sum to the lender. A HUD statement is then delivered to Wachovia by the Title Company, and a decision is rendered, generally within a few weeks.

In certain situations, Wachovia will offer the seller a cash bonus to assist with moving expenses. All short sale banks should approve short sales like Wachovia and when they do the entire Real Estate Community will all feel like they have all died and gone to Real Estate Heaven! 🙂

Enhanced by Zemanta

Fed Cracks Down On Mortgage Servicers, Banks

Immediate changes coming to the foreclosure industry. Lenders being held accountable for improper foreclosure process. ALL foreclosures starting in 2009 to be examined for infractions and owners given compensation….and/ or their homes are to be GIVEN BACK TO THEM.

NOTE: the AG Robo-Signers settlement will be in addition to this…so, more changes coming to the foreclosure process.

The Office of the Comptroller of the Currency, the Federal Reserve and the Office of Thrift Supervision released enforcement action against 14 major bank/servicers in the form of consent orders.

Bank of America , JP Morgan Chase , Ally Financial, Wells Fargo, SunTrust, Citibank, HSBC, MetLife, PNC, U.S. Bank, Aurora Bank,   EverBank, OneWest Bank and Sovereign Bank will all be hit with no fewer than 16 new requirements for mortgage servicing and loss mitigation.

These 16 new requirements are more or less what the requirements were always thought to be…. forcing the servicers to improve on foreclosure documentation, oversight, and chain of ownership. Additionally, lenders are required independent reviews and a single point of contact for borrowers facing foreclosure. The action prohibits dual tracking, when one arm of the bank pursues foreclosure while another pursues modification.

Another detail, servicers (banks) will also be held accountable of their third-party vendors, including lawyers, who provide foreclosure services. No more…”that was an outside company we hired…we had no idea they were doing X”. Banks must comply within 120 days of the order. Most of the big banks have already implemented many of these ‘new’ requirements. The second we get an official copy of these 16 new requirements we will publish them.

And now the really interesting news….

Penalties are coming… “The Federal Reserve believes monetary sanctions in these cases are appropriate and plans to announce monetary penalties.”

And…. The OCC also says the enforcement actions, “do not preclude determinations regarding assessment of civil money penalties.”

In other words, we are talking about potentially huge penalties and judgments from the civil claims.

As part of this new enforcement the banks will be required to engage an independent firm to review foreclosure actions from January 1, 2009 through December, 2010 to assess whether foreclosures complied with federal and state laws and whether there were in fact grounds to foreclose.

You read that correctly, all foreclosures that happened between 01/01/09 and 12/01/10 will be reviewed by (hopefully) independent firms looking for infractions.

And what happens if (when) infractions are found….?

If borrowers were harmed by the foreclosure process the banks will have to remediate the borrowers in some way. Remediation could include monetary damages and even the borrower getting the home back.

Imagine all the folks who lost their homes to foreclosure that will be filing claims. Lenders will be required to create a system where by anyone who feels they suffered financially can submit a claim.

Click on this link to watch the video from CNBC News: CNBC Video on Fed Cracks Down On Mortgage Servicers, Bank

Source:  Real Estate Insiders News By: Tim and Julie of Harris Real Estate University.

Enhanced by Zemanta