Learn how to get your Chase/Ocwen short sale approved in this Chase/Ocwen Short Sale Case Study.
Chase/Ocwen Short Sale Case Study:
Property Location: Snohomish, WA - Snohomish County
1st Lender: Chase
2nd Lender: Ocwen
Hardship: “We are unable to make out monthly payments due to the large adjustment of rate on our loan. We had intended on living here forever, but due to the large increase in payment, rising taxes, and repairs that need to be done we are just unable to afford it any longer. Our home feels more like a burden than it does a home.
“The repairs that need to be made are: skylights are in need of repair or replacement, one part of an exterior wall in the kitchen needs repair from extensive water damage, electricity needs to be hooked up the the detached garage, outbuildings in need of repair. Carpets need replacement, wood floors need repair and refinishing. Furnace needs duct work put on. Foundation near kitchen has two openings in it, unknown if supposed to be opening for access or not. Baseboard heaters need replacing, master bedroom addition needs refinishing.
“We would really like to get this situation resolved as quickly as possible, and thank you for your assistance.”
1st Loan Balance: $204,395
1st Loan Arrears: $30,922
2nd Loan Balance: $79,189
2nd Loan Arrears: $6,473
Sales Price: $229,950
Approved Commissions: 6%
1st Loan Approved Net Proceeds: $193,410
2nd Loan Approved Net Proceeds: $4,751
Timeline: On April 13, 2010, the short sale package was submitted to the lenders. On May 20, a written offer to purchase for $239,950 was received, and Seattle Short Sales worked with both lenders to escalate the case and have negotiators assigned. On June 4, upon reviewing the poor condition of the home, the purchase offer was lowered to $229,950. On June 17, forms to complete were received from 2nd lender (Ocwen) indicating maximum 4% realtor commissions. On June 22, 1st lender (Chase) requested documentation that property is owner-occupied.
On July 1st, Chase assigned a negotiator to the case. Chase stated that the buyer’s offer was too low, and needed to be at least 90% of market value. Seattle Short Sales worked to demonstrate to them that the offer is in line with current market value and actually exceeds the BPO. New BPO received at $210,000. On July 9th, Chase indicated that the maximum that they would approve for the 2nd lender was $3000. On July 30th, Seattle Short Sales negotiated with 2nd lender to accept $3000 as well as commissions at 6%. Meanwhile, the 1st lender closed the file awaiting approval from 2nd lender. Seattle Short Sales had them reopen the file on August 9th.
On August 30th, Ocwen as second lender issued an approval for the short sale, with acceptable net proceeds of $3000 and closing by September 30th. Seattle Short Sales forwarded the letter to 1st lender with a request for them to resume their approval. On September 4th, Chase requested updated financial information from seller.
On September 9th, Chase assigned a negotiator to the file. Seattle Short Sales made repeated attempts through the month to contact the negotiator in order to expedite the file, as 2nd lenders approval expires at the end of the month, and requested escalation of the file. On September 20 first contact was finally made with the lender, now via a different negotiator, who requested updated tax returns and other financial info from the sellers. Delays are in part because the 1st lender has not taken into account the very poor condition of the house and have unrealistic expectations of the selling price - their BPO coming in at $299,000. Seattle Short Sales investigates the possibility of processing the short sale through HAFA and of obtaining a more realistic appraisal that takes into account the condition of the property and the high cost of repairs.
On September 27, the 2nd lender extended their approval for another month, through to the end of October. 1st lender says only that they are behind on their processings. On October 20th the HAFA application package was prepared, with 2nd lender proceeds now set at $4.751. On October 21st, the 2nd lender agreed to extended their approval again, to the end of November, and on October 26th issued a revised approval letter. Seattle Short Sales continues to work with lender on a realistic sale price; negotiator expects that investor will require minimum $246,00, which is unrealistic for the condition of the property, but submits file for approval at sales price of $229,950. On October, Chase as 1st lender approved the short sale and issued the approval letter.
Result: The homeowner was able to sell a home that had dropped in value to less than what was owing on her mortgage, and that was rundown and in need of costly repairs that she could not afford. She received a total of $123,000 discounted from the funds owed on her two lines. She did not have to sign a promissory note or make any cash payment upon closing, and by going through the HAFA program she received the $3000 cash incentive upon completing the sale, and was also relieved of any future obligation to pay back the deficiencies on the loans. Processing the short sale through HAFA also meant that both lenders received cash payments as incentives to expedite the sale, and that real estate commissions were kept to 6% in spite of previous efforts by lenders to lower them.
To download a copy of the 1st short sale approval letter, click here: http://seattleshortsales.com/LiteratureRetrieve.aspx?ID=73487
To download a copy of the 2nd short sale approval letter, click here: http://seattleshortsales.com/LiteratureRetrieve.aspx?ID=73486
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/
Comments
Post has no comments.