I recently had a Fort Walton Beach FL Short Sale approved by Washington Mutual (WAMU). In this case, WAMU was the junior lien, the first was Citi Mortgage. There was enough from the sale proceeds to satisfy Citi's mortgage balance, so the only approval necessary was from WAMU. As with all Short Sales, we know to provide a preliminary settlement statement (HUD) with the package to the seller's lender. This is a guide upon which the lender bases its approval. As a rule and for the sake being conservative, I instruct the title agent preparing the HUD to overestimate the prorations. Why? In Florida, property taxes are paid one year in arrears, so there is typically a credit from seller to buyer at closing. (In some other states, property taxes are paid in advance.) So in order to prepare for a long-delayed lender approval, I may use a closing date four to five months out. The settlement statement will show the seller crediting a higher amount of taxes to the buyer. That way there won't be a last-minute problem with proceeds to the Short Sale lender being too low to meet the amount on the approval letter. They will usually get more than their stated approval amount using this method. The same technique applies to condo or association fees, or other prorations. If there is a problem meeting the exact approval amount because prorations are off, normally Short Sale lenders understand, and will issue a revised approval letter with adjusted figures. I don't like taking the risk, so I choose to overestimate.
Now, back to Washington Mutual. In the Fort Walton Beach Short Sale, WAMU asked for the payoff amount from Citi (the first) to be used exactly in the preliminary HUD. Unfortunately, the Law Office of David Stern, who was handling the foreclosure on this Citi mortgage, would only provide a payoff for a month. WAMU issued its approval letter about two weeks after receiving the payoff. The buyer took four more weeks to close. The payoff to Citi increased- of course. The HUD was redone prior to closing, showing a now-lesser amount to WAMU. WAMU did not care. They were immovable. They refused to adjust their approval amount even with proof of the new figure required to satisfy the first mortgage. Guess who paid the difference? I lost some respect for WAMU that day.
It's Wendy!
Wendy Rulnick, Broker, CRP, CRS, GRI, ABR Rulnick Realty, Inc.
Short Sale Pre Foreclosure Help.
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Wendy Rulnick specializes in real estate sales, short sales, traditional sales on Emerald Coast of Florida: Destin Florida real estate, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Dune Allen, Blue Mountain Beach, Freeport, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field. Wendy Rulnick, Broker and Realtor, has been selling real estate for almost 20 years. She has won numerous awards, including the coveted ADDY for advertising design. An expert marketer of real estate listings, she negotiates successfully to her dients' advantage. She is supported by a team of top buyer specialists. She lists and sells homes, condos and townhomes.
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I think I would have been a little ticked with the attorney, did you not have a closing date at the time the estimated HUD was prepared? Short sales all come with their little hoops we have to jump through, congrats on getting yours done.
It is crazy that this is such a hard concept to grasp. Ultimately, they got what they wanted anyway, so it kind of reinforced their lack of understanding.
Wendy,
Well done.
I do have a problem with "I lost some respect for WAMU that day." Your problem was with Citi and their attorney not Wumu. Wumu was the only one taking a loss. If Citi was taking a loss they'd be more cooperative. Before we get mad it's important to identify the villain.
Yes, I know the sellers took a loss but the short sale saved them an even bigger loss.
Bill
Wendy,
I have not had good experiences with WAMU. I have had two strong offers in to them on short sales and it appears that they were more concerned with what they were owed, in other words it did not seem that they were paying attention to the BPO.
On one deal where they held the first and second liens, the BPO would clearly come in around $180,000 and I had an offer at $172,000. There were about 14 short sales and bank owned on the market within about 2 blocks and I of course showed that to them on a market analysis. They were owed around $299,000 and they said they would have to see an offer around $270,000 to talk....of course that was not going to happen. They went to auction with an opening bid of $315,000 I think.
I am hopeful that they having a better grasp on the market now - that was earlier this year.
Kim
Wendy,
I have not had good experiences with WAMU. I have had two strong offers in to them on short sales and it appears that they were more concerned with what they were owed, in other words it did not seem that they were paying attention to the BPO.
On one deal where they held the first and second liens, the BPO would clearly come in around $180,000 and I had an offer at $172,000. There were about 14 short sales and bank owned on the market within about 2 blocks and I of course showed that to them on a market analysis. They were owed around $299,000 and they said they would have to see an offer around $270,000 to talk....of course that was not going to happen. They went to auction with an opening bid of $315,000 I think.
I am hopeful that they having a better grasp on the market now - that was earlier this year.
Kim
Colleen - We didn't have a closing date because Short Sale hadn't been approved. It was a little "hoop" guess I had to pay for!
Randall - Good observation.
Bill - I still have a problem with WAMU being unreasonable. I bet if taxes had changed, they would not have varied, either. BUT thank you for the "well done"!
Kim - That is very unreasonable on WAMU's part. And it does not make sense.
Wendy, perhaps someday you'll be able to make a soap opera about your short sale experience. The players remain the same, but drama is around every corner. I come back to this blog time after time, I'll learn something or I'll just shake my head at the way things some time play out. Thanks!
Laura - Every day is indeed a soap opera! You only hear part of it! Never boring. Thank you for commenting.
It is a very intresting market. I have had borrower that have made offers on properties that are short sales. I have had a few go easy and quick and a few that did not. We can only keep our heads up right.
Keep working hard.
Krista - "Keep working hard". That is the key!
Wow that's just wrong of Wamu. I hope I don't run something similar.
Mike - I'll be better on the defense next time, too.
Wendy,
I'm a former Wamu employee and to tell you the truth they are very uncooperative. While I was still working with Wamu I tried helping out a customer of mine to get her loan renegotiated du to the fact that her fixed rate had expired. It took us 2 months to get a negotiator assigned to the loan and took another 2 months to get the docs for the modified loan and after we got everything signed and submitted we waited for another 2 months for a response by that time they have already started the foreclosure process and the customer ended up having to give up her home after all the mess that we went thru. Right now I work for a Real Estate firm and still having issues with Wamu we sent in an offer for a short sale that I was doing with them we have a solid cash offer and three months have passed still haven't heard anything from them. Everyday that I call them all they say is they are waiting for a negotiator to be assigned to the loan.
Adrian
Adrian - What a sad story for your customer! Flagrant idiocy.
Go figure, isnt Wamu one of the biggest culprits in this whole mess? I had heard that they were working direclty with their customers to modify loans, I guess I was mis-informed.
Ginny - Perhaps they are in some cases. I don't see consistency with any of the big players.