Wells Fargo Nixes Extensions on Residential Short Sales
04. Oct, 2010
21 Comments
In an interesting development Wells Fargo has stopped granting extensions for distressed homeowners to complete short sales, a move that will expedite foreclosures.
From the article:
“Mary Berg, a spokeswoman for Wells, said its new policy on short sales was put in place “over the past couple of months . in response to various investor changes.”
Those investors, she said, “would include the GSEs, Department of Housing and Urban Development (HUD) and those investing in private-label” MBS.
Yet Wells’ decision also follows efforts by the Obama administration to encourage short sales for borrowers who do not qualify for loan modifications.
“It makes no business sense why they are doing this, since it’s wrong for the borrowers and for the government,” said Eli Tene, chief executive of IShortSale, a Woodland Hills, Calif., firm that advises distressed borrowers.
Wells said it will make an exception to the new policy for loans in its own portfolio, which includes those it acquired with Wachovia Corp. in 2008. For these loans, Berg said, Wells allows for one foreclosure postponement, provided the following: it has an approved short sale in hand that includes approvals from junior lienholders and mortgage insurers; the buyer has proof of funds or approved financing; and the short sale can close within 30 days of the scheduled foreclosure sale.
Experts on short sales said that in recent months servicers have been reluctant to approve such transactions out of concern that the buyer will not get financing, or that the buyer’s lender will not be ready to close, causing the buyer to lose patience and walk away from the deal and further prolonging the process.
>> From Structured Finance News – Click here to read the entire article.
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I think that this is great news. Sellers living in homes and will not or cannot ever make payments need to be FORECLOSED ASAP and vacate the property. Good for you Wells Fargo
Obviously Ann is not a Realtor who spends months of work WAITING for the bank—not the Buyer’s Lender, to respond. Also, Ann, perhaps it’s not your neighborhood plagued with foreclosed properties as many of our communities unfortunately are. Wake up, Investors. Not a wise or financially productive move.
Ann must have an REO account
Although this process will help clear out the clogged short sale process, at the end the most benefit is for the lender (investor) and not the consumer. We know that a valid short sale is better than a foreclosure for a consumer/homeowner. A short sale allows a consumer/homeowner to get back on track sooner than later when compared to a foreclosure. The decision taken up by Wells Fargo is suited for their benefit and not the consumer. I Do not support this decicion.
This is actually bad news as far as I’m comcerned. From my experience most short sales can close within the 30 day time frame allowed by the lender. It’s almost always not the fault of the borrower…usually it’s an attorney or realtor who gets involved in short sales and does not have the knowledge to be involved in the first place.
Ann you must be very naive, the banks are the reason we are in this mess and they continue to be the main problem. If you ever had the experience in completing a short sale, the SELLERS lender is the reason short sales are a nightmare. Not the Buyer or the Buyers lender. Its just more finger pointing by the bank, they are trying everything possible to deflect the real issue at hand. THE SELLERS BANK IS THE PROBLEM !!!
This is unfortunately the new approach that lenders feel they can get away with now. They held off for a long time due to all the bad news and their involvement in creating a financial nightmwre due to their greed and manipulation.Yhey somehow feel that the dust has settled enough that they can return to their old way of doing business again and won’t be taken to task for it
I agree with Ann and Mario. To get the economy back on track and running, these homes need to be sold as REO’s as fast as posible, then the market can recuperate to healthy status.
Right now it is a “farce”.
When institutions take the hard line approach to problem solving, the way it seems to be happening here with Wells, what, if anything, is the consumer to do? I once heard one group of disgruntled underwater homeowners threaten to pull out their money from Bank of America for their apparent insensitivity to the plight of their otherwise “good” customers. But, this is a bigger problem than one bank or one group of customers can resolve, there really must be some measures put into motion just like they did for the BANKS with the TARP, only this time they need to insure that the money gets to the people and not to the executive bonuses! Shame on these folks.
I agree with most of the people who think this is a BAD idea and I mostly agree with Rocco. But what does Well’s Fargo really care what we think? KenO
It’s time to end the all the delays and get the shadow inventory into the market place. Realtors kept fighting to not let the banks into the real estate market and the only way to get them out now is to clear out the foreclosed and short sale inventory. Currently they are controlling the market and commissions.
If the banks start taking this approach, then they need to find a way to approve short sales in a reasonable amount of time.
Taking four months to get an answer, no wonder buyers walk and then when you get a new buyer… it takes another four months the lenders need to speed up their processes…
Wells Fargo is a disgrace to the financial industry, real estate industry and the economy in general. Since they don’t care what we think or care about the efforts agents put in to release distressed situations, let Wells “clean” their house and lose money in the process (idiots!). This mess should be a learning experience to all of us — NEVER EVER, NEVER EVER get a home loan from them, EVEN if it means you stay put for a while longer in the place you call home right now. Hell will freeze over before Wells touches a penny of my money, be it in checking or savings/retirement accounts, loans or with whatever all they lure you in! Amen!
Ok Ann.. Unless you have been on the other side of the fence where you are honestly doing anything and everything possible to get out of foreclosure and at the end of the day the shoot you down for something stupid.. trust me! You wouldn’t be saying that if you were these homeowners… Its like saying.. You got cancer and ur close to dying and the only reason Drs can’t save u/give you treatment is because you didn’t initial on page 2.. You tell me where is the fairness in that!!!! Be careful if I were you because you never know when you’ll be in a similar situation!
I helped a seller avoid a Wachovia foreclosure by getting him a short sale contract. That part went pretty smoothly.Then I helped him on the phone with the loan mod for which his income and hardship make him a good candidate. The telephone people didn’t even know their own guidelines. After the second call, he got approval on the phone and followed up by submitting all the paperwork. Now at this point it should be pretty simple. Send it to an underwriter an get a decision, right? Nope. It has been over a month. Nada. The thing that pisses him off the most is that Wachovia sales people had tele marketed him aggressively and had gotten him to switch from his fixed rate mortgage. Check out the HOME Act, Dennis Cardoza, California. It takes loan modification out of the banks hands.
I agree that the problem is the Un-Educated Realtor, The lenders, trying to cover-up their complete failures, to include hiring sub contractors that act like credit card debt collectors and know nothing, further delaying the process. The Buyer can not even talk with the asset lenders own employee’s which further delays the process. We need the gov’t and to a certain extent, the realtors out of the business, particularly negotiating with the banks, and let the buyer/investor have more involvement, after all they are the ones buying the property!!!
I for one am going to pursue Mortgage Assignments which are completely legal and does not involve the seller all the pain of loosing their credit rating and makes it easier for the buyer to own a home she/he can afford from the seller that needs to get out because of the mess that Rep. Barney Franks and Sen. Chris Dodd as well as frannnie and freddie have created. WHEN ARE THESE PEOPLE AND ENTITIES GONG TO BE BROUGHT TO JUSTICE BY THE THE WAY!!!! Anything the gov’t gets involved in fails, don’t be fooled by the BS and out and out lies the great success of General MOtors and/or the stimulus waste package!!
OH, not to further my own rant, if you buyers/investors fully disclose your intent than you will also cover yourself. Full disclosure of your process should be reviewed by a Licensed Attorney with in the state you are conducting business.
JUST MY OPINION!!
What happened to all those people who were saying that government should be run like business? Now that the banks have screwed things up, set up their own Ponzi scheme, found a way for taxpayers to bail them out and then still reward CEO’s with millions in bonuses, the question has to be: why are corporations paying less in taxes than they were ten years ago.
In these difficult times, the middle class and poor deserve a break, not the corporate fat cats.
I second that, there is some shady dealings going on right under all of our noses. But what can we do?
I can’t even count the # of recent postponements of Foreclosures I have recently received from Wells Fargo…It can be done people.
And yet another way financial institutions keep the financially distressed homeowners down..