Case Studies

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

Citi/Provident Short Sale Case Study:

Property Location: Seattle, WA - King County

1st Lender: CitiMortgage

2nd Lender: Provident Funding Assoc.

Hardship:
“In the past year there have been many changes causing hardship and making it more difficult to pay my mortgage. Though currently up to date with my mortgage payments, this will soon not be the case.

“After moving in with my partner last year, and seeing the market fall, we decided to make the choice to rent the property out in hopes of a rebuilding market. Even with this rental income, there is still a deficit between the income amount and the amount owed, that is becoming harder and harder to pay. The house has drastically depreciated in value leaving me no equity for the option of refinancing.

“I have been a contract Registered Nurse for the past four years, but the falling job market is forcing me to change. I have signed on with another hospital as a permanent employee, since there are no loner any contract opportunities in the Seattle area for my field of expertise. By doing this, my income is decreasing by 25%,

“Over the past three and a half years, I have never once had a late payment, and I take my obligation to pay back the mortgage very seriously. It is my full intention to pay what I owe. But at this time I have exhausted my income and resources and m turning to you for help.”

1st Loan Balance: $249,197

1st Loan Arrears: 0

2nd Loan Balance: $63,397

2nd Loan Arrears: 0

Sales Price: $155,000

Approved Commissions: 6%

1st Loan Approved Net Proceeds: $130,505

2nd Loan Approved Net Proceeds: $9,500 plus $6,000 promissory note

Timeline:
On May 6, 2010, the short sale approval process was initiated. A BPO (Broker’s Price Opinion)was undertaken, and the home was listed for $209,000. On September 18, 2010, a signed off to purchase for $185,000 was received. A new BPO was ordered so that the new offer could be worked with.

Seattle Short Sales, Inc., worked with all parties (seller, buyer, lenders, agents) to come up with sales price, minimum proceeds, and commissions that were acceptable to all parties. On October 13, the first lender issued an approval letter for the short sale.

Seattle Short Sales, Inc., continued to negotiate with second lender, who was demanding $15,000 cash payment and a $20,000 promissory note in order to approve the sale, explaining that the sellers were not able to come up with this; this demand would break the deal. Seattle Short Sales, Inc., proposed that the 2nd lender accept the $6,400 minimum proceeds.

On November 2, Seattle Short Sales, Inc., asked the 1st lender for a 30 day extension to their approval. On November 6, the 2nd lender denied the offer, and Seattle Short Sales, Inc. worked to negotiate a middle ground with them so that the deal would go ahead, offering $6,400 sales proceeds plus $3,100 cash (to be come up with from buyer and seller) plus a $6,000 promissory note. The seller agreed to the promissory note and on November 5 the 2nd lender approved the short sale.

On November 20, the buyers walked away from the deal, and the home was relisted. On January 25, 2011, a signed off to purchase for $140,000 was received from a new buyer. Financial figures were reviewed, and this offer was not high enough to meet lenders’ minimum acceptable proceeds.

On March 6, 2011 a new buyer submitted a signed offer to purchase for $155,000. On March 10, Seattle Short Sales, Inc, resubmitted the short sale file to both lenders for approval, using this new offer. The following day, a revised BPO was ordered, and updated financial documents were prepared and submitted to lenders.

On March 21, the 1st lender issued an approval letter for the short sale, and on March 28 the 2nd lender issued approval for the short sale, with closing by May 5, 2011.

Result:
The homeowner, wanting to take action before getting behind on her mortgage payments, and avoid any damage to her credit rating, was able to undertake a short sale of the home that she would soon not be able to afford payment on, and that was worth about half of what she owed on her mortgages. She paid off both mortgages, receiving a total discount on $167,000 on them, and was waived of ever having to pay back the deficiency balance on either one. She was able to wash her hands of this home, and start her financial life anew.

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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