Short Sale Policy at Wells Fargo

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Short Sale Policy at Wells Fargo

Short Sale PolicyThe email that I have shared below was in my inbox last week. I actually received it a few times from Wells Fargo negotiators who are working short sales with me. There new policy is described. Check out the email and then my comments below it:

The email about the Wells Fargo Short Sale Policy:

If you are receiving this email, I currently am working on your short sale file or have worked on your file in the past few months. PLEASE READ THIS WHOLE EMAIL AND FORWARD TO ANY PARTIES WHO MAY BE WORKING ON A SHORT SALE FOR WELLS FARGO.

Due to recent industry changes, we at Wells Fargo will no longer be granting any extensions for short sale close dates or postponing foreclosure/trustee sale dates. If you were issued an extension letter dated 9/14 or earlier, those extension letters will be honored, but no further extensions will be granted. Files must close by expiration date on the original approval letter or they will be removed. If your approval expires 9/15 or 9/16, you will have 48 hours to get me the final HUD for approval and close.

Please let me know if you have any questions! Thank you!

The part of this letter that struck me were the words ‘recent industry changes’. At the beginning of the year, I reported on the fact that the news media reported that Fannie Mae was making it a policy to prohibit the postponement of Trustee’s Sales. However, I really didn’t see that trickling into out market. Yet during the summer, things began to change. Most recently, I reported that Fannie Mae will now penalize servicers who allow delinquent mortgages to ‘languish too long.’

ASC, America’s Servicing Company, is also a Wells Fargo Company. Wachovia is a Wells Fargo Company as well. So, if you are working on short sales with any of these three servicers, do not forget to do your homework!

Here are several posts that I have written that touch on some of the very same points:

Short Sale Negotiations with Fannie Mae

How to Determine Whether You Have a Fannie Mae Loan

Latest Trends in Short Sale Negotiations

Foreclosure Sales Are All the Rage

Comments

  1. Crystal

    I am a purchasing a short sale from WF. The short sale letter expires Monday along with our contract. We tried to close a week ago and had submitted the HUD to WF for final approval 48 hours before closing, like they asked!! They still havent approved it!! What happens if THEY let their own short sale letter expire. We held up our end of the deal!

    • Melissa Zavala

      That happens sometimes and the person representing the seller who needs to get that approved needs to work a little harder on that. But, in the event that the bank delays, they will provide an extension for a day or two. Hope that helps!

  2. Grace

    We have WF as 2nd lien holder in our shortsale. Pay-off comes from the 1st lien holder and a portion of the buyer’s credit at closing. Is it mandatory in California that the full pay-off amount should be reflected in the HUD instead of being itemized between the 1st lien and buyer?

    • Melissa Zavala

      Usually everything is disclosed on the settlement statement. This settlement statement generally needs to be approved by both lien holders 48 hours prior to the closing of the transaction.

  3. Edward

    I am purchasing a short sale from Wachovia. The owner asked to lease back this short sale house. I do not know whether it is ok. I will appreciate it very mcuh if you can give some suggestions!

    • Melissa Zavala

      What you need to look into is whether Wachovia has an addendum to the purchase contract that you are required to sign. Some of these addenda do not permit rentbacks.

  4. Zachary Brock

    I’m in the process of buying a short sale and Wells Fargo only gave us 15 days to close it! I have to close by this Jan. 4th.
    It is going to be very close, everyone is saying maybe.

    Whats the chances of us getting an extension?

    • Melissa Zavala

      Usually they will grant an extension and offer to give at least month total for the closing. It’s important that the short sale processor or listing agent communicate that information to WF as soon as possible.

  5. Zachary Brock

    Well today is the fourth and we didn’t close. My agent sent a short sale extension to the bank yesterday with a new closing date and we didn’t hear anything today. This good or bad news?
    My agent says he isn’t too worried about it being an issue.

    Thanks

    • Melissa Zavala

      Frequently those things can take a few days or even a few weeks. I wouldn’t be too worried. Just check in regularly with the bank negotiator on status.

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