Case Studies

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

LBPS Short Sale Case Study:

Property Location: Seattle, WA - King County

1st Lender: LBPS

Hardship:
“My wife and I purchased this property knowing we would be here for quite some time together. Clearly due to unforeseen circumstances we were divorced in September 2008, and even before that separated in February 2008. I have been completely financially responsible for paying the mortgage. My ex-wife walked away from everything including the car, house, etc. and I went from a dual income to just one.

“During the past 2 years I have burned through any savings that I had, sold what I could, tried to work side jobs, and nothing has helped me to keep up with the bills. Die to the current global economic downturn, my job has also been affected. There have been not raises, one third of our entire firm has been laid off, and there is talk of mandatory salary cuts or moving to part-time work. Meanwhile, the cost of living is not decreasing, and I’ve had to resort to credit cards to exist and it has just become overwhelming for me. Every month I have to choose which bills I can pay and which I can’t. I have been prioritizing my mortgage payment, however with the payment being approximately 60% of my monthly income, it has just become too much. With the homeowners fees, utilities and other hard costs making it more like 70%, I find myself drowning with no choices.

“Unfortunately the value of this condo has dropped significantly. They (the management company) auctioned off the last units just to fill the building since it was new, and the units had been sitting on the market for so long. Which means that trying to sell it by normal means would only cause me to lose money that I don’t have in the first place.”

1st Loan Balance: $332,842

1st Loan Arrears: $13,690

Sales Price: $230,000

Approved Commissions: 6%

1st Loan Approved Net Proceeds: $199,936

Timeline:
April 13, 2010, a signed offer to purchase the property for $230,000 was received. Seattle Short Sales, Inc., submitted the file to Metlife Home Loans, the lendr listed on the mortgage papers, for approval. After numerous attempts to contact Metlife, it was finally determined that the loan had been sold to LBPS. In August, 2010, Seattle Short Sales, Inc. started aggressively contacting LPBS, and had the file escalated to a supervisor’s attention, but was still not able to get a response from the lender. Although the buyer became frustrated and walked away from the deal, the Seattle Short Sales, Inc, case manager continued to push the file with the lender, in the hope of attracting a new buyer.

On October 26, a new signed offer to purchase the home for the same price was received. Seattle Short Sales, Inc., continutd to push for approval with the lender, without informing them that the buyer had changed (which would have started the approval process all over again). On December 10, LPBS issued approval for the short sale, and Seattle Short Sales, Inc. immediately initiated the process to change the buyer’s name and submit their proof of funds. On December 28, LPBS issued a revised approval letter, naming the new buyer, for closing by February 6, 2011.

Result:
The homeowner, unexpectedly divorced and on reduced income due to cutbacks at work, was able to undertake a short sale of the home that he could not afford and that was worth less than what he owed on the mortgage. He paid off the loan with $147,000 discounted from the balance owing, and was relieved of any obligation to ever have to pay back this deficiency balance.

To download a copy of the short sale approval letter, click here: http://seattleshortsales.com/LiteratureRetrieve.aspx?ID=76569

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/