Postponing a Trustee’s Sale: Is it Possible?
If you read my blog with any regularity whatsoever, then you may recall a post around a month ago in which I reported that the latest short sale trend, in my opinion, is the foreclosure sale. How did I arrive at this conclusion?
The answer is quite simple. Good old-fashioned hard work. You see, my office (Short Sale Expeditor®) negotiates short sales for Realtors® throughout California. At the beginning of August, we witnessed a significant increase in the number of foreclosure sales that were scheduled for this past month. In fact, approximately 1/8 of all of our files (27 short sales) were actually scheduled for auction (Trustee’s Sale) during the month of August, 2010.
If you process short sales then you know that postponing and/or attempting to postpone these sales takes time, tenacity, and a detail-oriented nature. Since that is my nature (my super power is tenacity), I was eager to see how the month would unfold. Would we be able to postpone these sales? Would the banks be willing to postpone these foreclosures? Would the investor note holders agree to continue to review the short sales that were currently being processed?
Well, I am pleased to report that in most cases the investors did agree to postpone the auction dates and entertain the short sales.
Of the 27 short sales scheduled for foreclosure in August, 24 of the sale dates were postponed. Here are the trends that I observed:
Any foreclosure sale date associated with Freddie Mac was nearly impossible to postpone. I had three Freddie Mac short sales on the chopping block: two went to sale and, in only one instance, the foreclosure was postponed. The two Freddie Mac transactions that were serviced by Bank of America ended up in foreclosure sales (one had extenuating circumstances, so read on). The Freddie Mac loan serviced by Wells Fargo resulted in a sale date postponement.
Of the two Freddie Mac loans that went to sale a few weeks ago, one had a counter offer, and the second lien holder had Mortgage Insurance. So, Bank of America was requesting a significant cash contribution which the seller and/or buyer were unwilling or unable to produce. We were told that Freddie Mac would have postponed the sale if the seller would have agreed to the contribution.
The third short sale that became a foreclosure was a GMAC loan with GreenTree in the second position. GMAC had approved the short sale months ago, and GreenTree said that they would not work on the file until they received short sale approval from the first lien holder. Unfortunately, GreenTree refused to speed up their process even though we explained that this was not going to work out well for them (or our mutual client) if they did not hurry it along. Sadly, GreenTree did not hear our message loud and clear.
Overall, however, I think that the study of my August foreclosure sale dates and the analysis of the trends is pretty interesting. Considering the number of auction dates on the table, I’d say that my staff and I did a pretty darn good job on the postponements. Now, what’s up for September? Only 22 sale dates are currently on the calendar. So, stay tuned.
Liked this post? Here are a few others that I’ve written on similar topics: