Case Studies

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

BECU Short Sale Case Study:

Property Location: Everett, WA - Snohomish County

1st Lender: BECU

Hardship:
“We would like to explain our current financial situation and request the approval of a short sale of our property.

“Due to our recent divorce, as well as my ex-husband’s job loss last year, we are unable to meet our financial obligations on our mortgage. Neither of us can afford to keep the property on our own, between car payments, credit card bills, student loans ($60,000 worth) and medical bills.

“We have lived in our home since May 2008 and have, until recently, been on time in making our mortgage payments. We had every intention of living here for many years. We fully intended to make everything work, unfortunately, it just didn’t work out. Due to our financial hardship and the declining economy we can no longer meet this obligation. We are actively pursuing a short sale because we want to get as much money for the property as possible, and to avoid foreclosure.

“We have enclosed documents for the past 2 months to illustrate our financial situation. We live paycheck to paycheck and have no savings. All of our money goes to bills and food with very little left over for any extras.

“We are embarrassed that we are in this current situation and would like to avoid further financial difficulties by continuing negative credit and mounting financial obligations. We want to short sale our home and settle our debts.”

Sales Price: $56,500

1st Loan Balance: $168,620

1st Deficiency Balance: $121,862

1st Settlement: Deficiency waived!

Timeline:
The homeowners contracted a real estate agent and listed their home for sale on March 8, 2011. The home was listed for sale for $79,700.

On March 17, the Listing Agent passed the file to a Seattle Short Sales, Inc., case manager. The case manager reviewed the file, and on March 18 requested that the Listing Agent provide some financial documents which were missing. These were provided on March 29. On April 4, the Seattle Short Sales, Inc., case manager submitted to the file as “complete, waiting for buyer” to BECU, the lender.

On July 29, a signed offer to purchase the home for $56,500 was received. On August 2, the Listing Agent sent the purchase offer, along with updated financial documents, to the Seattle Short Sales, Inc., case manager.

The lender, BECU, undertook a BPO (Broker’s Price Opinion) which, they indicated, came in higher than the purchase offer. On September 14, BECU indicated that the sellers would have to contribute $20,000 to close the sale. The sellers responded that they did not have the money to do that, and that they also could not afford any type of monthly payment. The BECU negotiator said that she would take that information into account, and be in touch the following week.

On September 29, BECU issued an approval letter for the short sale, for closing by November 15, with explicit wording waiving the sellers of having to repay the deficiency: “BECU will receive no less than $46,758.36 at closing. We are waiving the deficiency.”

Result:
The homeowners, a divorcing couple, were able to sell the home that neither of them could afford on their own. They paid off only 28% of their mortgage (paying their lender $46,758 of the total $168,620 owing) - a discount of  $121,862 - and were waived of ever having to repay this deficiency balance. Both homeowners were able to move forward with their new lives, knowing that their old house debt would never come back to haunt them.

To download a copy of the short sale approval letter, click here: http://seattleshortsales.com/LiteratureRetrieve.aspx?ID=93640

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/

Learn how to get your HSBC/BECU/Citi short sale approved in this HSBC/BECU/Citi Short Sale Case Study.

HSBC/BECU/Citi Short Sale Case Study:

Property Location: Kent, WA - King County

1st Lender: HSBC

2nd Lender: BECU

3d Lender: Citi

Hardship:
“We have been unable to make our mortgage payments for the last several months and see no alternative but to put our home on the market as a short sale.

“When the home was purchased in 2006 our monthly payments were at $3,279.24. Since that time, I lost my job, but have since got another one but at half the pay. I continue to look for a better paying position, but at this time I still make about half of what I was previously bringing home.

“Our first mortgagee (HSBC) has put us on a loan modification plan, but the payments are now at $3,774.18. They began including our past due property taxes sine we were behind. That is what has made the modification payments go higher than our original mortgage payment. We just cannot afford to make these payments.

“We had planned to live in this home forever. We spent much of our savings on some remodeling of the kitchen and new floors throughout the downstairs. We wanted this to be our “grow old in” home, but now cannot see how.

“We need to sell this home and get our accounts settled.”

1st Loan Balance: $424,436

1st Loan Arrears: $13,177

2nd Loan Balance: $13,120

2nd Loan Arrears: $200

3rd Loan Balance: $17,023

Sales Price: $339,000

Approved Commissions: 5%

1st Loan Approved Net Proceeds: $295,834

2nd Loan Approved Net Proceeds: $3,000

3rd Loan Approved Net Proceeds: $3,000

Timeline:

The homeowners wanted to keep their home and had negotiated a loan modification - but the monthly payments after the modification were $500 higher than their original payments, so they were forced to put their home on the market.

On April 11, 2011, a signed offer to purchase the home for $339,000 was received. Three lenders had mortgage liens on the property, and on April 18 the Seattle Short Sales, Inc. case manager submitted the short sale package to all three lenders.

The first lender, HSBC, approved the short sale, reducing broker commissions to 5% and allowing $3,000 to both junior lenders, but waiving the deficiency balance, the following day.

Both junior lenders requested $3,000 each. Seattle Short Sales, Inc., indicated that there were not enough funds to do that, reminding Citi that they were in 3rd and not 2nd position and offering them $500.

Seattle Short Sales, Inc., indicated to BECU as 2nd lender that the seller did not have the funds to pay any deficiency balance, and that if this deal was to go ahead BECU would have to waive the $10,320 deficiency balance. On May 12, BECU issued their approval of the short sale, with clear language in the letter stating “We are waiving the deficiency.”

On May 19, Citi as 3rd lender issued an approval letter for the short sale, but demanding a promissory note (with scheduled repayment plan) for $12,000 - claiming that the homeowner had agreed to this. The case manager ascertained that the homeowner had not in fact agreed to this, and asked them to reissue the approval letter without any demand for a promissory note. Seattle Short Sales, Inc., worked with the buyer to get them to agree to contribute $400 towards Citi as 3rd lender, and on May 24 Citi issued a revised approval letter that did not require any promissory note or repayment plan and that indicated that the $3,000 payment would “satisfy the account in full.”

Result:
The homeowner was no longer able to afford her home due to a 50% wage cut. An attempt at a loan modification failed, as the monthly payments following the modification were actually $500 higher than the original payments.

The homeowner conducted a short sale of the home, and paid off the three mortgages with a total of $166,122 discounted from the balances owing. The specific language in all three approval letters specifically waived the homeowner of having to pay back the deficiency balances, so she was able to get a clean new financial start on life.

To download a copy of the 1st short sale approval letter, click here: http://seattleshortsales.com/LiteratureRetrieve.aspx?ID=87455

To download a copy of the 3rd short sale approval letter, click here: http://seattleshortsales.com/LiteratureRetrieve.aspx?ID=87457

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/

Learn how to get your Citi/BECU short sale approved in this Citi/BECU Short Sale Case Study.

Citi/BECU Short Sale Case Study:

Property Location: Seattle, WA - King County

1st Lender: Citi

2nd Lender: BECU

Hardship:
“My husband’s pay has been cut approximately 40% over the last year and a half, and he has been unable to find another position to make up the difference in lost income. I have been able to find a part-time job, but have been unable to find a full-time position. Also, I make a great deal less per hour than my husband.

“When we originally bought our house, we had every intention of staying here until our children were grown. We made out mortgage payments on time every month until my husband’s wage cut. In addition to being unable to make the mortgage payments, we are also unable to cover the cost of any upcoming repairs to the house. We had to remove the old shower stall last year because it was leaking. Should anything else break or need to be replaced, we just don’t have the resources for it at this time.

“We would like to sell our house and have our lender receive as much as possible in this market to repay our loan. We feel that a short sale is the only possibility for us at this time.”

1st Loan Balance: $356,805

1st Loan Arrears: $23,123

2nd Loan Balance: $100,000

Sales Price: $310,000

Approved Commissions: 6%

1st Loan Approved Net Proceeds: $263,651

2nd Loan Approved Net Proceeds: $5,800

Timeline:
On November 15, 2010, a signed offer to purchase the home for $310,000 was received. Financial documents were prepared, and on November 23, the completed short sale packages were submitted to both lenders. On November 30, Seattle Short Sales, Inc., contacted Citi (the first lender) for an update, and were told that the file will first be assigned to an advisor who will order the BPO (Broker’s Price Opinion) and that then the file will be assigned to a negotiator. The BPO was completed on December 8.

On December 10, Seattle Short Sales, Inc., contacted Citi again about progress, and the following day Citi assigned a negotiator to the file, who requested further financial documentation in order to assess the case. Seattle Short Sales, Inc., worked with the homeowner to acquire the necessary documents and to get second lender started on the approval process.

On December 18, Citi indicated that they need to see the approval from the second lender before approving the sale; but second lender indicated they will not even discuss the sale without first seeing Citi’s approval. Seattle Short Sales, Inc., worked to resolve this stalemate. On December 21, Citi as first lender issued their approval for the short sale, for closing January 31 and waiving the deficiency balance.

The following day Seattle Short Sales, Inc., contacted Citi to make sure that the January 7 foreclosure sale date was postponed in order to allow this deal to go through, and asked for a status update on the approval. On December 24, the second lender’s negotiator indicated that they would be out of the office until the new year, and would look at the approval letter issue at that time; they needed a new BPO in order to determine whether they would accept Citi’s offer of $5,800, and also needed to work out whether they would be working out a repayment plan for the deficiency balance. The homeowners then filed for bankruptcy, and included second lender BECU in the bankruptcy.

On December 31, Seattle Short Sales, Inc., contacted Citi because the foreclosure sale date had still not been postponed; this was finally done. By January 5, concerned that time was running short for buyers to meet January 31 closing deadline, Seattle Short Sales, Inc, On January 11, Seattle Short Sales, Inc. acquired the bankruptcy documentation and forwarded it to BECU to prove that they were included in the bankruptcy.

On January 19, BECU as second lender issued their approval for the short sale, waiving the deficiency balance, for closing on January 31, 2011.

Result:
The homeowners, no longer able to afford their home because of wage cuts, and owing more on their two mortgages than the home was worth, were able to undertake a short sale of the home. They paid off both mortgages with a total discount of $210,000, were waived of ever having to pay back the deficiencies, and so were able to get a fresh start in life.

To download a copy of the short sale 1st approval letter, click here: http://seattleshortsales.com/LiteratureRetrieve.aspx?ID=78620

To download a copy of the short sale 2ns approval letter, click here: http://seattleshortsales.com/LiteratureRetrieve.aspx?ID=78621

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/