Case Studies

Learn how to get your Aurora/E-trade short sale approved in this Aurora/E-trade Short Sale Case Study.

Aurora/E-trade Short Sale Case Study:

Property Location: Marysville, WA - Snohomish County

1st Lender: Aurora

2nd Lender: E-trade

Hardship:
“In January of 2010 my wife lost her job and a significant portion of income, at the same time I took a 10% pay cut. Then in July of 2010 I lost my job. We were unable to get unemployment due to the fact that I am a minister and have not paid into it.

“We have been living off of savings, which we no longer have. We tried to modify the loan, but were denied due to our lack of income.

“I have medical bills now and coming as well. My wife was working 10 hours a week, but now she is no longer employed so she has no wages or current pay stubs to show.

“We have recently moved out of state for work, but I have not been paid yet so I have no pay stubs to show either.”

1st Loan Balance: $263,000

2nd Loan Balance:  $12,406

Sales Price: $175,000

1st Loan Approved Net Proceeds: $150,721

2nd Loan Approved Net Proceeds: $5,000

Timeline:
On May 7, 2011, a signed offer to purchase the home for $170,000 was received. The Listing Agent forwarded the case to Seattle Short Sales, Inc., on May 9. A BPO was ordered, and the Seattle Short Sales, Inc., case manager submitted the completed file to the lenders on May 11. On May 13, the case manager ensured that the file was complete, and that it would stay complete and upto-date in order to postpone the trustee sale.

The following week, the original buyer walked away from the deal, but on May 16 a new signed offer to purchase for xxx was received. The Seattle Short Sales, Inc., case manager faxed the new offer and documentation to the lender. On May 20, the case manager contacted Aurora, the first lender, to ensure that the trustee sale (currently scheduled for May 27) was postponed, and was told that the negotiator was aware of the date and would postpone it when they reviewed the file. The case manager called the lender back daily for the following week to make sure that the sale really was postponed.

On May 24, an approval was received from the first lender, but the Seattle Short Sales, Inc., case manager had to counter back that approval, as it did not cover excise tax or any payment to the second lender. The case manager continued to check daily that the trustee sale was indeed postponed; on May 25, the lender confirmed that the file shows that a short sale is being actively negotiated and that the trustee sale had been postponed to July. The lender also indicated that, if they were to cover 3% closing costs, the purchase offer would have to be raised to $175,000.

On June 6, the second lender requested updated financial statements and a payoff statement from the first lender, which the Seattle Short Sales, Inc., case manager started to assemble from the seller and from Aurora. The following day, on June 7, Aurora, the first lender, issued their approval letter for the short sale.

On July 13, the Seattle Short Sales, Inc., case manager requested the payoff statement from Aurora for the second time. The following day, Aurora responded that they would provide the payoff statement, but it could take up to 7 days to issue.

The Seattle Short Sales, Inc., case manager, continued to negotiate with E-trade, the second lender. On June 27, E-trade indicated that they would approve the short sale, and the seller could choose between providing $3,000 acceptable net proceeds for a lien release, or$5,000 for a full settlement.

The seller chose to settle the account, and E-trade issued their approval letter for the short sale on June 29.

Result:
The sellers, a married couple with drastically reduced income due to unemployment, were able to  avoid foreclosure by conducting a short sale of their home. They paid off their first mortgage with $112,000 discounted from the balance owing, and their second mortgage with a $7,000 discount. But, best of all, they were waived of ever having to pay back either deficiency balance - a total savings of $119,000.

To download a copy of the 1st short sale approval letter, click here: http://seattleshortsales.com/LiteratureRetrieve.aspx?ID=88779

To download a copy of the 2nd sale approval letter, click here: http://seattleshortsales.com/LiteratureRetrieve.aspx?ID=88780

If you are a homeowner, and would like to learn more about short selling your home, please go to: http://seattleshortsales.com/homeowners/

If you are a real estate agent, and would like to learn about our no-fee short sale service, please go to: http://seattleshortsales.com/agents/

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Learn how to get your Bank of America short sale approved in this Bank of America Short Sale Case Study.

Bank of America Short Sale Case Study:

Property Location: Everett, WA - Snohomish County

1st Lender: Bank of America

Hardship:
“The reason of this letter is to explain why I couldn’t keep up with the payments on my house. Where I work, they had to reduce my hours and all employees’ hourly wages. I’m making less money that I was making originally, and bills began to go up.

“As my kids began to grow up, the demands began to get higher needs of of food, clothing, school supplies and other necessities. An everything started to come down on us. I tried my hardest to keep up with the payments. Due to the fact I felt forced, I applied for credit cards to pay off the monthly payments on the home, and that did not help the situation.

“Now I’m at the brink of where I have reached so many debts where I can barely keep up with any payments. And that is why I need to sell the house.”

1st Loan Balance: $228,500

Sales Price: $124,000

Approved Commissions: 6%

1st Loan Approved Net Proceeds: $105,257

1st Deficiency Balance: $123,243

1st Settlement: Deficiency waived!

Timeline:
A signed offer to purchase the property for $124,000 was received on March 31, 2011. The Listing Agent forwarded the file to the Seattle Short Sales, Inc., case manager on April 4th, 2011. The necessary financial and legal documents were assembled, and the completed short sale package was submitted to the lender on April 19 along with an application to process the sale through HAFA.

The lender responded the following day with a request for additional financial documents in order to consider the HAFA application. The Seattle Short Sales, Inc., case manager immediately uploaded the documents that she had available, and requested the outstanding ones from the Listing Agent.

On April 29, Seattle Short Sales, Inc., received the Validation BPO (Broker’s Price Opinion) that had been requested. On May 16, the lender indicated that all required documents had been uploaded and that the file was currently in underwriting, which would take about two weeks to complete. On May 20, the file was approved to proceed through HAFA. On June 9, still not having heard anything from the lender’s negotiator, the Seattle Short Sales, Inc., case manager requested that the file be escalated.

On June 22, the lender presented a counter-offer of $130,000 purchase price, with no closing costs, but allowing the HAFA credit of $3,000 to the seller. The following day, the buyer agreed to come up to $127,000, which was the limit that their loan officer would approve. The Seattle Short Sales, Inc., case manager submitted this counter to the lender, working to get the 3% closing costs approved by the lender.

On July 11, the Seattle Short Sales, Inc., case manager contacted the lender for an update on the offer. The following day, the lender responded that they would probably have an approval within 3 days. On July 18, the Seattle Short Sales, Inc., case manager contacted the lender again requesting an update. On July 21, the case manager requested again for an update, to find out that a new negotiator had been assigned to the file. The new negotiator requested updated financial documents, and also indicated that the investor requested proof of funds available for the down payment.

The Seattle Short Sales, Inc., case manager revised and submitted documents for the entire file, reflecting a new extended closing date for the sale and a new HAFA application with that new closing date. On July 26, the case manager asked the negotiator to confirm receipt of all of the revised documents. The negotiator did, and also confirmed that the file had been submitted to the investor for final approval. and that an approval letter would probably be issued within two weeks.

On August 1, the lender requested additional financial documents, which the Seattle Short Sales, Inc., case manager provided. On August 5, the lender issued approval for the short sale to proceed through HAFA, and allowing the closing costs.

However, on September 14, the buyer indicated that their lender had undertaken an appraisal of the home, which came in at $122,000, and requested that the approved purchase price be lowered from $127,000 to $124,000. The Seattle Short Sales, Inc., case manager submitted this request, and the supporting documents, to the lender. On September 22, the case manager contacted the lender for an update.

On September 30, the lender issued a revised approval letter, dropping the sales price to $124,000, and dropping their approved minimum net proceeds from $107,934 to $105,257.

Result:
The homeowner was able to sell the house that he could no longer afford, paying off less than half of what he owed on the loan. Since the sale was processed through HAFA, he was waived of having to ever pay back the $123,000 deficiency, and he also received a relocation credit of $3,000. He avoided foreclosure, and walked away with no debts remaining from his home.

To download a copy of the short sale approval letter, click here: http://seattleshortsales.com/LiteratureRetrieve.aspx?ID=90734

If you are a homeowner, and would like to learn more about short selling your home, please go to: http://seattleshortsales.com/homeowners/

If you are a real estate agent, and would like to learn about our no-fee short sale service, please go to: http://seattleshortsales.com/agents/

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Learn how to get your Green Tree/PNC short sale approved in this Green Tree/PNC Short Sale Case Study.

Green Tree/PNC Short Sale Case Study:

Property Location: Granite Falls, WA - Snohomish County

1st Lender: Green Tree

2nd Lender: PNC

Hardship:
“It is with great remorse that I write this letter, seeking a short sale of my home. I make this request for several reasons, namely:

• business failure
• curtailment of income
• excessive obligations, and
• fraud

"Prior to the economic downturn, I was earning $50,433 as services manager for a company that sells and services pools and spas. The company has recently reduced half of its employees to half-time status. Although I am still working fulltime, to help keep the company afloat I have experienced a drastic income cut.

“I now receive $26,960 per year, after taxes. This is not enough to pay my monthly mortgage payments, which total $1,686.86 per month ($1,596.98 to Green Tree and $89.88 to PNC) as well as my other living costs and financial obligations. After paying the mortgages, I am left with $559.81 per month, but my other obligations come to $1,621.53 per month. With my reduced income, it is impossible for me to make all of these payments.

“Also, I do believe that fraud was committed against me when I initially signed my loan documents. When I initially was purchasing my home, it was explained to me that I would be getting a traditional 30-year fixed-rate mortgage. These were the documents that I reviewed and that I was prepared to sign.

“However, at the last minute before closing, my mortgage broker switched the papers on me without notice. What was supposed to be a traditional 30-year fixed mortgage instantly became an interest-only mortgage with an 8-year adjustable arm, meaning that the $1,596.98/month that I pay Green Tree isn’t even going towards the principal. I have since learned that the mortgage broker that I was working with has a history of unethical practices - including holding himself out to home buyers as being with a company that he had long separated from.

“Despite the fraud committed against me in the signing of my initial loan documents, I have always striven to pay my mortgage. I love my home and I am saddened that I can no longer afford to keep my residence. I am a hard worker, and pride myself on taking care of my responsibilities. However, the economy has taken a turn for the worse, my finances are struggling, and I can no longer afford to pay my mortgage payments. I need to survive.”

1st Loan Balance: $227,046

2nd Loan Balance: $28,004

Sales Price: $138,000

Approved Commissions: 6%

1st Loan Approved Net Proceeds: $117,050

2nd Loan Approved Net Proceeds: $5,000

Timeline:
Seattle Short Sales, Inc., received the file from the Listing Agent in January 2011. The file was prepared, awaiting a buyer.

On March 31, 2011, a signed offer to purchase the home for $135,000 was received. The Seattle Short Sales, Inc., case manager contacted the Listing Agent in order to start assembling all updated financial documents.

On April 20, the first lender indicated that a negotiator had been assigned to the file, and forwarded a letter for the seller to apply to process the sale through HAFA. The Seattle Short Sales, Inc., case manager passed along that information to the seller via the Listing agent, and requested additional required financial information.

Meanwhile, the second lender indicated that they would approve the short sale, but would not waive the deficiency. The seller indicated that he was reluctant to proceed with the sale if he was going to still be responsible for the deficiency. The Seattle Short Sales, Inc., case manager explained to him that he was not required to proceed with the sale if he did not feel comfortable with it, but that he suggested continuing to proceed with it trying to have it proceed as a HAFA transaction, which would automatically waive the deficiency.

On May 5, the buyer countered with a new purchase price of $138,000. On June 8, Green Tree as first lender issued their approval of the short sale. Meanwhile, the Seattle Short Sales, Inc., continued to negotiate between the seller and PNC as second lender regarding the issue of the deficiency, PNC requested financial documents, which the Seattle Short Sales, Inc., case manager resent in May. On June 10, PNC requested further financial documents, which the case manager also prepared and sent, while applying a bit of pressure to them to move forward with their approval process.

On June 15, PNC requested the last few months of Green Tree mortgage statements from the buyer. The Seattle Short Sales, Inc., case manager explained that, since the loan was in default, there were no recent mortgage statements: they had not been issued. But he forward another copy of Green Tree’s approval letter, which showed the balance owing on the 1st mortgage.

On June 17. PNC indicated that it would not consider the transaction through HAFA, as the amount offered to junior lien-holders ($6,000) did not meet their minimum requirements.

On June 30, the Listing Agent contacted Seattle Short Sales for an update, as the buyers wanted information on whether the sale was to go ahead. The Seattle Short Sales, Inc., case manager contacted the PNC negotiator again, stating that they had provided every piece of documentation that PNC had requested, and demanding a response. The negotiator promised that they would have an answer the following week.

On July 7, the PNC negotiator indicated that, since the sellers would not agree to pay the deficiency, they could offer a “full settlement” which would require a minimum cash payment of 60% of the balance owing, or $16,750, due upon closing. The Seattle Short Sales, Inc., case manager explained this to the seller; since Green Tree was only allowing $1,662 to junior lenders, the seller would have to come up with the difference. PNC indicated that they could counter that value, but the counter would have to be very close in order to be considered.

On July 10, the seller contacted the PNC negotiator directly, providing a copy of an (expired) offer from PNC to settle his account for $13,832, but indicating that the maximum he couldpay was $4,000. The negotiator wrote back that that offer had expired on April 22, but she would see if they would come back to the offer of $13,832.

The Seattle Short Sales, Inc., requested that PNC accept a promissory note rather than the cash on closing, as the seller did not have the cash. The PNC negotiator indicated that the seller could either pay the cash to close the account, or he could pay $5,000 for a lien release and still be responsible for the $23,000 deficiency, and that this offer was not negotiable. On July 27, PNC issued an approval letter for the short sale.

Result:
The homeowner was able to sell the home that he could no longer afford. The total discount on his two mortgages was $133,000, and he was relieved of having to ever pay back the $110,000 deficiency balance owing on the first mortgage.

To download a copy of the short sale 1st approval letter, click here: http://seattleshortsales.com/LiteratureRetrieve.aspx?ID=90294

To download a copy of the short sale 2nd approval letter, click here: http://seattleshortsales.com/LiteratureRetrieve.aspx?ID=90295

If you are a homeowner, and would like to learn more about short selling your home, please go to: http://seattleshortsales.com/homeowners/

If you are a real estate agent, and would like to learn about our no-fee short sale service, please go to: http://seattleshortsales.com/agents/

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Learn how to get your Chase short sale approved in this Chase Short Sale Case Study.

Chase Short Sale Case Study:

Property Location: Seattle, WA - King County

1st Lender: Chase

Hardship:
“We could no longer afford payments on our home due to a drastic cut in my salary as well as my wife no longer working.

“We had hoped to qualify for a loan modification because we wanted to continue living in our home, but each time we were denied. Due to the stress of trying to keep our home I became very ill and hospitalized with stress-related illness that I continue to suffer from.

“When we left our home, people broke in and damaged the property. We have filed a report and await the legal process. The overwhelming stress brings us to a place where emotionally we realize we can no longer fight for our home. Please allow us to sell our home and settle this financial burden.”

Sales Price: $185,000

1st Loan Balance: $225,541

1st Loan Arrears: $1,357

1st Deficiency Balance: $89,092

1st Settlement: Deficiency waived!

Timeline:
On August 21, 2011, a signed offer to purchase the home for $171,500 was received. The completed short sale package was submitted to Chase, the lender, on September 20. On September 28, Chase indicated that a negotiator would be assigned by the following week.

On October 6, Chase confirmed that the negotiator had been assigned. That same day, the negotiator indicated that, although they would be countering the purchase offer at $204,000, if the buyers would come up to a minimum sales price of $184,500 he would submit the file to the investors. The Seattle Short Sales, Inc., case manager contacted the Listing Agent with that information, requesting the buyers to come up with their highest and best offer.

On October 10, the Chase negotiator followed up, looking for a response to the counter-offer. The Seattle Short Sales, Inc., case manager followed up with the Listing Agent, who indicated that he had not received any of her emails, but that he would now the buyers’ agent.

On October 13, the buyers agreed to come up to $185,000. The Seattle Short Sales, Inc., case manager immediately created the HUD and faxed it to the Chase negotiator. The negotiator requested a revised HUD showing the $20,000 seller incentive on it and the MLS listing report, which the Seattle Short Sales, Inc., case manager provided that same day.

The following day, on October 14, Chase issued their approval for the short sale, waiving the deficiency and providing the seller incentive.

Result:
The homeowners were not only able to avoid foreclosure by undertaking a short sale of the home that they could no longer afford - they were also waived of ever having to pay back the $89,000 deficiency on their loan. And, on top, they received a $20,000 incentive payment from their lender!

To download a copy of the short sale approval letter, click here: http://seattleshortsales.com/LiteratureRetrieve.aspx?ID=94761

If you are a homeowner, and would like to learn more about short selling your home, please go to: http://seattleshortsales.com/homeowners/

If you are a real estate agent, and would like to learn about our no-fee short sale service, please go to: http://seattleshortsales.com/agents/

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