Learn how to get your Wells Fargo/NCB short sale approved in this Wells Fargo/NCB Short Sale Case Study.
Wells Fargo/NCB Short Sale Case Study:
Property Location: Ferndale, WA - Whatcom County
1st Lender: Wells Fargo
2nd Lender: NCB Management
Hardship:
“Several factors have affected our financial decline. One being I am a commission salesman and the economy has decreased our sales significantly; therefore, my income has also decreased. My job is affected by the weather, and consequently we have had a very mild winter that has caused my sales to be down. Although we hope for an increase, there is no way to foretell any near future increase in sales or income.
“In the fall of last year, our son’s student loans all became due. We had been putting them on a forbearance hoping our financial situation would improve, but could no longer put them off so we consolidated them on a government loan option. Our total portion of his bill is $71,406 and therefore our monthly commitment is $413.00.
“We also have had to use our credit cards for living expenses because we valued making our mortgage payments on time. We can no longer continue in this situation. Somehow we must stop the financial ‘bleeding.’
“Finally, due to an unexpected health emergency, my wife has to return to Canada to help care for her elderly parents and this has created a total loss of her income for the foreseeable ffuture.Also, because she is self-employed we have not set aside the tax portion for last year and this year because we had no extra cash-flow to do so.
“In light of the above situation, we humbly request that you allow us to execute a short sale of our home as soon as possible to prevent mortgage foreclosure. I see no hope for us to retain this home and we are willing to release the deed in lieu of payment if that is a more acceptable option to you. With the amount of stress we are now under, this would certainly be the easiest solution for us.”
1st Loan Balance: $279,995
1st Loan Arrears: $1,902
2nd Loan Balance: $52,036
Sales Price: $305,000
Approved Commissions: 6%
1st Loan Approved Net Proceeds: $222,080
2nd Loan Approved Net Proceeds: $10,450
Timeline:
On December 8, 2010, a signed offer to purchase the home for $250,000 was received. The short sale package was prepared by Seattle Short Sales, Inc.,, and submitted to both lenders on December 28. (The case had been initiated the previous July, after a purchase offer was received, but that buyer walked away from the deal before any approval letters were issued).
On January 25, 2010, a representative from BSI Financial contacted Seattle Short Sales, Inc., indicating that they are the servicer for MCM, which had purchased the note for the loan from Wells Fargo.
Seattle Short Sales, Inc., started to work with the BSI negotiator immediately on a series of counter-offers in order to get the sale approved. The BSI negotiator indicated that the seller’s credit would likely have to be eliminated and that MCM normally does not approve agent commissions above 5%.
Meanwhile, the second lender, US Bank, had assigned this debt to NCB Management. Seattle Short Sales, Inc., had offered them 10% of the balance owing ($5,200) but they insisted upon 30%. On January 28, the Seattle Short Sales, Inc,, case manager initiated negotiations with the second lender, in order to come up with a reasonable compromise.
On January 31, BSI as first lender issued an approval letter for the short sale. The Seattle Short Sales, Inc., case manager continued to work with the second lender, as well as approached the buyers’ agent to see if the buyers would come up with an additional $5,200, bringing the offer to second lender from 10% to 20%.
On February 3, the buyers indicated that they would agree to contributing the $5,200 in order to facilitate the deal. On February 8, the second lender issued their letter of approval for the short sale.
Result:
The homeowner, undergoing financial stress coming from numerous directions, was able to short sale the home that he could not afford to keep, saving over $100,000 on the balance owing on the two loans. He was waived of any obligation to pay back either of those deficiency balances, and so able to move ahead with his life and start over again.
To download a copy of the short sale 1st approval letter, click here: http://seattleshortsales.com/LiteratureRetrieve.aspx?ID=79504
To download a copy of the short sale 2nd approval letter, click here: http://seattleshortsales.com/LiteratureRetrieve.aspx?ID=79861
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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