Learn how to get your CMC/United Guaranty short sale approved in this CMC/United Guaranty Short Sale Case Study.
CMC/United Guaranty Short Sale Case Study:
Property Location: Monroe, WA - Snohomish County
1st Lender: Central Mortgage Company
2nd Lender: United Guaranty
Hardship:
We are seeking to be approved for a short sale of our home.
Both of our mothers are ill. One lives in Connecticut, and the other in North Carolina. My husband’s mother in Connecticut has been diagnosed with Stage IV bladder cancer and several serious side effects associated with the treatment. She is continuously in and out of the hospital with life-threatening complications.
My own mother is several years into a diagnosis of Alzheimer’s disease. Living on the West Coast made it difficult for us to visit and support our parents, who have worsening health conditions. We have spent at least $4000 per year for travel and been away from work to visit our parents. Given the prognosis for both of them, we consider it critical to be closer to our mothers. Now that we live in Delaware, we both travel to visit our parents. This involves both flying and driving and the expenses we incur doing this
In addition, the company my husband worked for went through four rounds of layoffs in 2009, and all employees making over $50,000 per year took a 5% pay cut and had 9 furlough days, resulting in a total 9% pay reduction for him. During the last layoffs in 2009, he lost his management position and was moved to a position where he had no seniority. He was told that, if there were further layoffs, he would probably lose his job.
Based upon our family situation and his employment situation, we made the decision to relocate to the East Coast. He found employment in November 2009, so he relocated to Delaware. We maintained two residences during the five months it took me to find employment, and I relocated to Delaware in April, 2009. I took a $16,000 pay cut for the new job. In order to pay for the move and pay off debts, my husband cashed his 401(k). We incurred several thousand dollars of credit card debt as a result of expenses we incurred in setting up our new home.
I am no longer employed and have no income coming in. This now reduces our income by $2,900 per month. This time I have will allow me to assist my father and siblings with my mother’s care as her illness progresses.
We also continue to assist our four adult children who have faced challenges in the bad economy by paying for medical insurance and bills. As they continue their education, we plan to assist them as our finances allow.
We loved our home in Monroe, and if not for our family and employment situation, we intended to stay. We have always paid our bills, and want to sell our home and settle our accounts. We can’t begin to tell you how much it means to our families to have us just hours away in case of emergency.
Sales Price: $371,000
1st Loan Balance: $416,459
1st Deficiency Balance: $80,659
1st Settlement: Deficiency waived!
2nd Loan Balance: $62,029
2nd Deficiency Balance: $56,029
2nd Settlement: Deficiency waived!
Timeline:
The file was opened on August 2, 2010. It was noted that, in addition to the two mortgages, there was a judgment lien on title for $19,984 in favor of the State of Washington.
The 2nd lien-holder, Pentagon Federal Credit Union, indicated that they would need a purchase offer in order to process the short sale request, However, the 1st lien-holder, CMC, indicated that they would be able to start to process the case without an offer yet on file. Seattle Short Sales, Inc., worked on gathering all of the necessary paperwork and financial documents together in order to submit the file.
On October 14, an offer to purchase the property for $371,000 was received. Seattle Short Sales, Inc., assembled the remaining documentation, and on October 22 submitted the completed short sale package to the lenders. The Seattle Short Sales, Inc., case manager also confirmed status with the 1st lender: although the case was in active foreclosure, no foreclosure sale date had yet been set.
On November 3, CMC requested financial documents to be submitted within 48 hours. The sellers were not able to provide the information on that time-frame, so the Seattle Short Sales, Inc., case manager arranged to extend the deadline. The documents were received from the seller, and submitted to the lender, on November 6. Meanwhile, the second lender indicated that they had received the necessary documents and that the file was under review.
Through November, Seattle Short Sales, Inc., continued to assemble and submit further updated financial documents, such as pay stubs and bank statements, to the lenders as requested. Seattle Short Sales, Inc., also pursued information about the judgment lien, eventually determining that it does not belong to this seller, and arranging to have it cleared from the property title.
On November 25, CMC as 1st lender confirmed that all required documents had been received, and that the file was now under review. The Seattle Short Sales, Inc., case manager worked at negotiating with the 2nd lender, who indicated that they would be demanding a promissory note, to come to an agreement for a promissory note that the sellers would actually be able to afford to pay, where payments would be no greater than $100 per month.
On January 7, 2011, Seattle Short Sales, Inc., forwarded along additional new documentation to the lenders, such as the buyers’ approval for financing, and Homeowner Association dues statement.
While the 1st lender was waiting for terms and demands from the 2nd lender in order to determine whether or not to approve the file, the 2nd lender lost track of notes on the file and had no record of the promissory note negotiations. The Seattle Short Sales, Inc., provided them with the necessary information again, and stressed that their terms were urgently required in order for the 1st lender to issue an approval. On February 23, the 2nd lender indicated that they would accept a promissory note for $3,500, payable over 36 months at 0% interest, with payments of $97/month. The second lender, now listed as as United Guaranty, issued their approval letter for the short sale the following day.
On March 3, the 1st lender requested additional and updated financial documents, which the Seattle Short Sales, Inc., case manager assembled and submitted on March 7. On March 15, the lender indicated that the file had been submitted for final review.
On March 22, a new and higher purchase offer for $365,000 (plus +$2,000 for attorney fees) was received. On March 24, CMC issued an approval letter for the short sale to the first buyer. Seattle Short Sales, Inc., contacted them through the Listing Agent to see if they were still willing to proceed to closing (since their offer had been made in October) but they were not.
The file was returned to the lender, with the new buyers listed. CMC ordered a new BPO, which was undertaken on April 8 and came in at $368,000. They indicated that they would need a higher offer from the new buyer. The buyer was reluctant to raise the offer, but eventually agreed to raise it to $371,000. The Seattle Short Sales, Inc., case manager sent all of the revised documentation to the 1st lender on April 18. On April 28, the 1st lender issued an approval letter for the sale to the new buyer.
Result:
The homeowners, whose decreased employment had caused them to fall behind on mortgage payments, and whose family obligations had required that they move to the East Coast, were able to short sale their home.
They were relieved of having to pay two mortgages that they could no longer afford. They paid off their first mortgage with a discount of over $80,000 on the balance owing, and their second mortgage with a discount of $56,000 on the balance owing.
Their total discount amounts to $136,000, and they were waived of ever having to pay these deficiencies back - so they can focus on their life ahead of them on the East Coast and dedicate themselves to their families.
To download a copy of the 1st short sale approval letter, click here: http://seattleshortsales.com/LiteratureRetrieve.aspx?ID=86089
To download a copy of the 2nd short sale approval letter, click here: http://seattleshortsales.com/LiteratureRetrieve.aspx?ID=83005
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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