Case Studies

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

Chase/SLS Short Sale Case Study:

Property Location: Edmonds, WA - Snohomish County

1st Lender: Chase

2nd Lender: SLS

Hardship:
I have a first mortgage in the amount of approximately $335,000 on my home. I stopped making my mortgage payments in February 2010 for the following reasons:

• I lost my job. At the time of my termination, the company owed me more than $60,000 in back wages. I have had two hearings on this matter, so far without resolution.
• I have been unable to find paying work sine November 2009.
• My ex-wife has refused to let me see my daughter, and we are in expensive, protracted, de-facto parenting litigation.
• My current wife has been unable to find paying work for over three years.

This has indeed been a perfect storm for me, and I have subsisted on unemployment insurance for most of the past year, supporting a household of five for most of that time. I regret sincerely not being able to make my mortgage payments, and never in my wildest dreams expected to be in a mess like this.

I intended to pay the mortgage last winter. But after I sold all the stock that I had and cashed out my retirement account, I had to choose between feeding my family or paying the mortgage. I expected that I would find work and catch up on the payments. It just didn’t work out.

I have had the house on the market since April of 2010, three times lowering the price. We now have the property listed with a short sale specialist, and we have lowered the price again two times. I am doing my utmost to sell the house in this very challenging market and get my account settled.

1st Loan Balance: $335,000

1st Loan Arrears: $27,000

2nd Loan Balance: $100,000

Sales Price: $320,000

Approved Commissions: 6%

1st Loan Approved Net Proceeds: $279,631

2nd Loan Approved Net Proceeds: $6,000 plus $4,000 cash payment

Timeline:
On November 9, 2010, Seattle Short Sales, Inc., received the signed listing agreement and broker agreement. Although there was no purchase offer at the time, since the Trustee Sale was scheduled for November 29, the completed short sale package was submitted to Chase, the first lender, the following day.

On November 15, a signed offer to purchase the home for $320,000 was received. Seattle Short Sales, Inc., requested that Chase postpone the Trustee Sale.

On November 19, Chase confirmed that the offer and the request for postponement had been forwarded to Freddie Mac, the investor. On November 22, Chase indicated that the Trustee Sale had been postponed to January 7, 2011, but that the file had not yet been assigned to a negotiator.

On December 1, a negotiator was assigned to the case. She indicated that the sale was ineligible for HAFA as both homeowners were not occupying the property. On December 2, Seattle Short Sales, Inc., submitted the short sale package to the second lender, Flagstar. On December 10, Flagstar made contact indicating that the loan had been transferred to SLS.

On December 16, Chase indicated that their BPO (Broker’s Price Opinion) had come in, and they would counter the offer at $360,000. On December 22, the buyers countered at $350,000.

On January 24, CHase requested that the entire short sale package be re-faxed to them, as a new negotiator had been assigned. The Seattle Short Sales, Inc., case manager prepared and sent off the package with the new $350,000 offer. Through February and early March, the Seattle Short Sales, Inc., case manager attempted to contact Chase about the case, but received no updates. Meanwhile, the sellers chose to declare bankruptcy. By March 15, the buyer indicated that they would continue to wait for the bankruptcy to proceed and for short sale approval, but that they wanted to lower their offer to $330,000.

On March 17, the Chase negotiator finally made contact. The Seattle Short Sales, Inc., case manager prepared documents with the new $330,000 offer. On March 24, the negotiator indicated that she might be able to approve the sale at “a little less than” $350,000, but that $335,000 would not be approved. She also requested additional financial documents.

The Seattle Short Sales, Inc., case manager requested all of the updated financial documents, including the bankruptcy documents, from the sellers, and on April 13 repackaged the short sale package and sent it to both lenders.

On April 14, the SLS negotiator indicated that the offer of $4,000 to settle the loan would not meet investor expectations, which would be around $15,000. Seattle Short Sales, Inc., worked at upping the offer from Chase to $6,000, and requesting contributions from all other parties to bring the offer to the second lender up to an amount approaching $15,000. Meanwhile, Chase indicated that they had a new negotiator on the case and would be ordering a new BPO.

On April 28, the new Chase negotiator indicated that the new BPO was in line with the current offer, and requested updated financial documents. The sellers, however, were now entering divorce proceedings, so paperwork was revised to reflect that only the husband was participating in this short sale.

On May 25, the Chase negotiator indicated that the offer would be approved, but that the bankruptcy would have to be discharged, or a letter from the court granting permission for the short sale would have to be issued, before the sale could go ahead. On June 9, a letter authorizing the sale was issued.

On June 10, the case was resubmitted to Chase, awaiting a new negotiator to be assigned, and a new BPO to be ordered, so it can be approved again. On June 22, Chase indicated that, due to the backlog in approvals, they did not know when the new negotiator would be assigned. Meanwhile, the second lender indicated that they would keep their case open, awaiting approval from the first lender.

On June 28, Chase assigned a new negotiator to the case. On June 30, the negotiator indicated that the purchase offer was reasonable, and requested further signed documents. Through early July, the Seattle Short Sales, Inc., case manager continued to contact Chase for updates. On July 12, the negotiator indicated that the file was now with the investor.

On July 15, Chase issued their approval letter for the short sale, allowing $6,000 to the second lender, with closing by August 30. Seattle Short Sales worked at coming up with an additional $4,000 from other parties to meet the second lender’s minimum required proceeds of $10,000.

On July 20, SLS as second lender issued their approval letter for the short sale.

Result:
The seller, undergoing financial distress due to unemployment and unpaid wages, as well as working through two divorces, was able to relieve himself from debts he could not pay by combining bankruptcy with a short sale.

He was able to sell the home that he could no longer afford, receiving a discount of $82,000 on the balance owing on his first mortgage, and a discount of $90,000 on the balance wing on his second mortgage. The total savings were $172,000, and he was waived of ever having to pay back these deficiency balances, and able to move ahead with his life without these debts hanging over him.

To download a copy of the short sale 1st approval letter, click here: http://seattleshortsales.com/LiteratureRetrieve.aspx?ID=89963

To download a copy of the short sale 2nd approval letter, click here: http://seattleshortsales.com/LiteratureRetrieve.aspx?ID=90005

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

GMAC/SLS Short Sale Case Study:

Property Location: Issaquah, WA - King County

1st Lender: GMAC

2nd Lender: SLS

Hardship:
“I have reached a point in my life that I am in financial fallout. I have struggled making ends meet since my separation with my wife in January 2005. I lost $110,000 of household income due to my ex-wife’s departure. At the time of our separation our boys were 14 and 16. I thought it was best to keep the house intact and not sell it, so that the boys would have an environment for their remaining high school days. This turned out to be a mental blessing, but a financial disaster.

“My 14 year old was Mr. Popular in school, but took the separation harest, quitting school and ending up in a metal hospital for 3 months. At that time, we had great health care. During the next 18 months, due to his mental state it caused me not to work the normal hours in my business , which was mostly travel every other week out of the state. This put me into a poor financial state.

“In the meantime, the bill for my divorce lawyer was piling up. We got divorced in October 2006 which was during the time the housing market was growing stronger every day. I had to get my wife (still at the time) off the title and give her the equity of the home after some additional joint bills were paid to settle the divorce.

“We had the house appraised, which came in at $740,000. In the meantime, my American Express balance was increasing dramatically due to the expenses of running a business. My house payment went from $3,200 to almost $5,000 per month due to a refinance I did in October 2006. In addition to all of this, I had the hard floors refinished, the carpet replaced, and the outside of the house painted, and I replaced the tile countertops to granite in the kitchen. I had just finished redoing the entire home with full intention of living there for a long time to come.

“The economy has contributed to my financial mess as well as the housing market. I should have sold the house at the time of the divorce, but kept it for my boys. It has lost over $250,000 in value. But if I had sold it at that time, I am not sure what my younger son would have done. He was suicidal during the separation according to notes from the hospital.

“I am sorry that this has happened. My intent was to live here for a long time. My circumstances have turned 180 degrees. I want and need to sell my house and get my debt paid off. I am out of money and don’t want to see the house foreclosed on.”

1st Loan Balance: $516,640

1st Loan Arrears: $9,000

2nd Loan Balance: $165,000

2nd Loan Arrears: $15,915

Sales Price: $515,000

Approved Commissions: 5%

1st Loan Approved Net Proceeds: $457,747

2nd Loan Approved Net Proceeds: $3,000 plus $25,000 cash payment

Timeline:
On October 27, 2010, a signed offer to purchase the home for $500,000 was received. The completed short sale packages were submitted to both lenders on November 10. Through the following month, the Seattle Short Sales, Inc., case manager worked towards achieving a deal that met both first and second lenders’ minimum acceptable proceeds by brokering a series of counter-offers between all parties. The second lender originally insisted on a $49,000 payment, but first would only pay $3,000. By negotiation, eventually an agreement was made for a $28,000 payment that came in part from buyer, from seller, by reducing the broker’s commission, and from the first lender;

The first lender issued their approval letter for this sale on January 7, and the second lender issued their approval letter on January 11, contingent on closing by January 31, 2011.

Result:
The homeowner, dealing with lowered household income following his divorce as well as unexpected medical bills for his son, was able to short sell his home, receiving a total discount of $246,000 on the two mortgages. Significantly, he was waived of ever having to pay back this deficiency balance, and so was able to make a new financial start in life.

To download a copy of the short sale 1st approval letter, click here: http://seattleshortsales.com/LiteratureRetrieve.aspx?ID=77768

To download a copy of the short sale 2nd approval letter, click here: http://seattleshortsales.com/LiteratureRetrieve.aspx?ID=77767

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

SLS/Chase Short Sale Case Study:

Property Location: Kirkland, WA - King County

1st Lender: SLS

2nd Lender: Chase

Hardship:
“In 2006, my husband left his job to pursue an education. In July of that same year, at the age of 24, I was diagnosed with breast cancer. I had to have ten surgeries over the course of two years. My husband had to put college on hold to take care of me. I had major complications following surgery and almost died. I had to take months off of work, mostly unpaid. With the debt piling up, we had to charge our credit cards to the max just to survive.

“My husband started back to school in 2008 and is pursuing a degree. We have done everything possible to make our payments. We have liquidated our retirement and IRA accounts, we have asked family to help. We are to the point now where we have liquidated everything possible, and we have no other choice but to short sale our home.

“This is our dream home, we intended on living here and starting a family. We never could have seen this coming. It is devastating to leave our home but we have no other choice.”

1st Loan Balance: $1,086,062.63

1st Loan Arrears: $4,235.30

2nd Loan Balance: $225,000.00

Sales Price: $890,000

Approved Commissions: 6%

1st Loan Approved Net Proceeds: $775.555.94

2nd Loan Approved Net Proceeds: $22,725

Timeline:
On October 3, 2010, a signed offer to purchase the property for $900,000 was received, and on October 11 the completed short sale package was submitted to the lenders. The first lender delayed on ordering the BPO (Broker’s Price Opinion) and Seattle Short Sales, Inc., called them through late October and early November to push to order it, and liaised with second lender so they knew to wait for the BPO. On November 10 the first lender indicated that they had now ordered the BPO. The second lender indicated that they were waiting to see an approval letter from the first lender before they would proceed.

On November 24, the first lender indicated that the file was close to being approved. Seattle Short Sales, Inc., continued to contact the lender about moving the file forward, and on December 8 the first lender issued an approval letter for the short sale, waiving the deficiency balance. The second lender agreed to expedite the file, since the closing date was December 31; a new negotiator was assigned.

While waiting, the original buyers walked away from the deal, but a new signed purchase offer for $900,000 was received from new buyers on December 15. The second lender issued approval for the short sale on December 20, and Seattle Short Sales, Inc., worked to extend the first lender’s approval date and to have the second lender waive the deficiency balance. However, the buyers walked away from the sale and the property was relisted.

On January 22 a new signed offer to purchase for $875,000 was received, and on the 27th later an offer from a different buyer for $895,000 was received and accepted. Seattle Short Sales, Inc., submitted updated financial documents to the lenders. A new BPO came in at $900,000, and lenders indicated that would be able to issue approval soon. On February 12, the first lender issued a new approval letter for the short sale, waiving the deficiency balance, and on March 1 the second lender issued a revised approval letter, which also waived the deficiency balance

Result:
The homeowners, a young married couple struck with an unexpected cancer diagnosis which affected their ability to earn income and left them with large medical bills, were able to short sale their home. The home was worth less than what they owed on the mortgages. They received a $315,000 discount on their first mortgage and a $202,000 discount on the second mortgage and were waived of having to ever pay back the deficiencies - a total discount of over half a million dollars.SLS/

To download a copy of the short sale approval letter, click here: http://seattleshortsales.com/LiteratureRetrieve.aspx?ID=82037

To download a copy of the short sale 2nd approval letter, click here: http://seattleshortsales.com/LiteratureRetrieve.aspx?ID=82595

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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