Case Studies

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

US Bank Short Sale Case Study:

Property Location: Bellevue, WA - King County

1st Lender: Chase

2nd Lender: US Bank

Hardship:
“I would like to get my accounts settled. Financially, I have not been able to sell my home since it was listed in October 2010 nor pay my first and second mortgages for four months.

“After my daughter moved out of my home for job opportunities in Seattle, I’ve been short of money. She lived with me prior to her move and helped pay monthly house bills in conjunction with monies for the company we ran together.

“My total income is $839 monthly from Social Security. This amount makes it impossible to provide for myself and pay monies due. I can’t even pay for household repairs needed: a slow leaking faucet underneath the kitchen sink, a dead fan in the kitchen, and a hole in the shed floor.”

Sales Price: $290,000

1st Loan Balance: $156,000

1st Settlement: Payoff

2nd Loan Balance: $220,117

2nd Loan Arrears: $4,779

2nd Deficiency Balance: $109,000

2nd Settlement: Deficiency waived!

Timeline:
On April 29, 2011, the file was brought to Seattle Short Sales, Inc., and the home was listed for sale for $385,950. The Seattle Short Sales, Inc., case manager began to assemble the short sale package, as well as an application to process the sale through HAFA, and requested missing documentation from the listing agent.

On June 11th, a signed offer to purchase the home for $300,000 was received. The Seattle Short Sales, Inc., case manager requested a BPO (Broker’s Price Opinion) and updated financial documents.

On July 8, Chase posted a Notice of Trustee Sale on the homeowner’s door. The Seattle Short Sales, Inc., case manager, requested necessary documents from the homeowner and listing agent in order to be able to submit a request to Chase to pay off the $150,000 owing on the first mortgage from forthcoming sale proceeds, and to stop the foreclosure process. On July 18, Chase agreed to the request and said that a payoff letter would be issued in the next 24 to 48 hours; the letter could then be submitted to the second letter to help with their approval process.

As the Seattle Short Sales, Inc., case manager worked with US Bank, the second lender, to facilitate the short sale approval, it became apparent that there were other liens on the property. The case manager urgently requested an updated title report, and started working on resolving those liens.

The Seattle Short Sales, Inc., case manager continued to follow up with Chase about issuing the payoff letter. Chase issued the payoff letter on August 8. The case manager continued to provide US Bank with updated financial documents and other supporting documents as requested. On September 9, US Bank indicated that all required documents were on file and the case was under review. The sale would proceed as a traditional short sale rather than a HAFA short sale.

US Bank assigned a negotiator to the case on September 26. The Seattle Short Sales, Inc., case manager continued following up with him requesting progress updates. On October 13, 17, and 18th the case manager requested that they expedite the file, as all documents had been received and it should be proceeding by now. On October 19, US Bank requested additional financial documentation. The Seattle Short Sales, Inc., case manager faxed all of the requested documentation to US Bank the following day.

The Seattle Short Sales, Inc., case manager continued to call US Bank for updates. On November 7, they indicated that they had received results of their BPO, but they would not share the value or whether the current purchase offer was within range of that value. Meanwhile, the payoff letter from Chase had expired, so the case manager requested an updated payoff letter.

On November 18, US Bank finally came back with a counter-offer, requesting net proceeds that were $19,841 higher than the net proceeds in the current offer. The Seattle Short Sales, Inc., case manager brought this information back to the sellers. The high request was because the seller’s ex-husband, who was still listed on the loan, had a high income. On November 30, Seattle Short Sales, Inc. countered back on behalf of the seller, raising the net proceeds by $15,000.

On December 15, US Bank issued their approval letter for the short sale, waiving the seller of having to repay the $97,000 deficiency. The Seattle Short Sales, Inc., case manager requested that Chase reissue their payoff letter again.

On January 3, the buyer rescinded the offer to purchase. The home was relisted at $315,000.

On January 6, an offer to purchase the home for $280,000 was received. The Seattle Short Sales, Inc., case manager submitted this new offer to US Bank. They responded, asking the buyer to match the original $300,000 offer. The buyer came back at $290,000.

On January 26, US Bank issued a letter approving the short sale with a sales price of $290,000, accepting net proceeds of $116,261, and waiving the seller of having to repay the $109,000 deficiency.

Result:
The homeowner was able to short sale her home and get out of paying two mortgages that she could not afford on her Social Security income. She repaid the first mortgage in full, received a $109,000 discount on her second mortgage, and was waived of ever having to repay that discount.

To download a copy of the short sale approval letter, click here: http://seattleshortsales.com/LiteratureRetrieve.aspx?ID=97489

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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“In 2007, I was stationed with CBMU 303 on Naval Sub Base, Bangor, outside Silverdale Washington. I had received orders to report to Japan, but only days before my family’s and my departure I was ordered not to depart and to resume duties at CBMU. With all the moving expenses I had already incurred, my conservative estimate of my losses was $17,400, of which I was reimbursed $0.

“My fiancée and I had sold our house in preparation for the move, so she and I, and my two kids and her two kids, rented a 3 bedroom house until we were able to purchase a perfect 4 bedroom house that could accommodate all of us (the house listed here). Shortly after closing the deal, my detailed called and sent me orders to NMCB18. Rather than relocate the family again, I chose to commute the 70 miles a day. The gas costs added up, though, and in the summer of 2009 we decided to rent this house out and relocate to base housing.

“My tenant had signed a lease through June 2011, but a year early she informed me of her intention to break the lease. I immediately put the house back up for rent but with no rental income, and no BAH from the Navy, I quickly exhausted any money I had saved including my IRA to keep the mortgage current.

“My engagement is now off as my fiancée could not deal with the Navy. My two kids and I are still living in base housing.I have no money left to continue to pay for a house I cannot move back into at this tim, however all payments are current as of this month and my agent has found a buyer who is in the process of purchasing my house.

“Nothing I had hoped and planned on transpiring has come to fruition and I have 9 more months before I retire from active duty. It was of course never my intention to put my fantastic bank (USAA) , the VA, or my family in this situation. My only remaining goal is to not default on anything and simply get out of this with some dignity and whatever remains of my previous excellent credit rating.”

1st Loan Balance: $296,446

Sales Price: $240,000

Approved Commissions: 4.1%

1st Loan Approved Net Proceeds: $214,419

Timeline:
On September 3, 2010, a signed offer to purchase the home for $218,000 was received. This low offer was not accepted, but on September 8 the purchasers raised it to $228,000 and the the short sale approval process was initiated. However, delays in receiving some of the paperwork meant that the buyers eventually walked away from the deal and on January 5, 2011, the home was re-listed at $229,000.

On January 13, a BPO (Broker’s Price Opinion) ordered by the lender came in at $245,000 - significantly higher than the list price. As Seattle Short Sales, Inc., looked into appealing the lender’s BPO, on January 28 a new signed offer to purchase for $222,500 was received. On February. the short sale package was submitted to the lender.

The Seattle Short Sales, Inc., case manager worked at getting comparable homes sales prices in the area in order to appear the lender’s BPO. The purchase offer was not sufficient to meet the lender’s minimum acceptable proceeds, so the Seattle Short Sales, Inc., case manager worked on negotiating closing costs and revising the appraisal in order to meet minimum finds required by all parties. On March 1, the buyers indicated that they would walk away from the deal if there was no approval within the next week.

On March 4, the lender indicated that VA would not allow an appraisal variance: the only way to make the deal go ahead was to increase purchase price or reduce closing costs. Seattle Short Sales, Inc., worked with all parties to achieve this. Buyers agreed to raise purchase price to $245,000 and reduce closing costs while maintaining 6% commissions. On March 15, Seattle Short Sales, Inc. worked at putting these revised figures into the new documents, and also reduced commissions in order to make this deal go ahead.

On March 17, US Bank as first lender issued their approval letter for the short sale. There was no mention of the deficiency balance in the approval letter. On March 29, however, the buyers walked away from the deal, stating as a reason the lack of an approval - even though the sale was already approved. Seattle Short Sales, Inc., ascertained that this approval could apply to new buyers provided that the terms of the sale remained the same, so the home was put back on the market.

On April 18, a new offer to purchase at the same terms was received. On April 20, the offer was modified to $234,000 with no closing costs. Seattle Short Sales, Inc., worked with these numbers to see if there was any chance of meeting the lender’s minimum acceptable proceeds, and on April 22 submitted the offer to the lender. The case manager requested that the new approval letter specifically waive the seller of any obligation to pay back the deficiency balance.

On April 27, US Bank issued an approval letter for the short sale, waiving the deficiency balance.

Result:
A complex set of circumstances had left the homeowner with a home that he was no longer able to live in, and not able to afford to rent out. He was able to short sale his home and, through the reissued approval letter, was waived of any obligation of having to pay back the $82,000 deficiency balance on the loan and able to get a new financial start in life.

To download a copy of the short sale approval letter, click here: http://seattleshortsales.com/LiteratureRetrieve.aspx?ID=85850

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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