Countrywide is the largest mortgage company in the US…think they are dealing with a short sale problem at the moment? You betcha. (not to mention short sales of their stock! Wish I had shorted them at $40!)
Countrywide’s Full Spectrum Lending division was the King of awful sub prime mortgages the past few years, and now those loans are going bad. If you have a countrywide loan and are facing foreclosure, a short sale of your home might be your best option.
I did a short sale of my home (and I had a first and second mortgage on the property) earlier this year. It can be done, but it requires patience and a plan and a little help. There are a zillion schmucks out there who will offer to “help” you when your down. Some are legit, most are not.
What I Did In My Short Sale
What I did (hiring a real estate agent with short sale experience) worked for my situation. It may not for your short sale, but I found it the best option. Working with a real estate agent you at least can get a background on the person, and if they work for a larger brokerage you know they have resources to help you. Think short sales are hard for you? They are equally as hard on the real estate agent! Getting a short sale deal done (especially right now with the overwhelmed lenders like Countrywide) takes alot of work. I do think its the best option vs. foreclosure though. You can also read my 7 steps to a successful short sale guide.
You Need An Experienced Short Sale Agent!
From my blog here I’ve developed an extensive network of real estate agents that have short sale experience. If you’d like a referral, fill out the form below and I’ll have someone available in your area to help with your short sale ASAP.
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We got the house! I suppose letting our realtor have it did the trick.
We need to close by 7/27.
Another happy ending!
Final Update:
After over 4 months our story has finally come to an end. We closed last Wednesday June 17th. The house is ours, we moved in over the weekend. We were in the situation where we could wait, but I know alot of you aren’t as fortunate. There were times when we wanted to move on, but we are so glad we stuck it out and couldn’t be happier with the place we got.
Good luck to all of you, hope you’re as fortunated as us!
One last IMPORTANT tip: It’s extremely important to have the seller’s agent or the person they hire to do the legwork with CW to be very diligent about contacting CW at least twice per week. In our case the seller’s agent had a lady from the title company take care of this responsibility, and I can’t say enough about the job she did, she was fantastic!!
WHat should I offer??? I’m reading all theese horror stories about short sales from Contry Wide…I found a home listed for $750k as a short sale, the origional loan amount was 1 million in late 06. Does anyone have any idea as to how many cents on the dollare CW might accept. We are a qualified buyer who can close as fast as they can produce paperwork.
@ Matt A
Where are you looking? It all depends on the area. The house we got that was just accepted was purchased and built in 06 for over 1 million w/out landscaping. Our offer was accepted at $675.
Have your Realtor run the comps in the area. You can also do some work yourself. I used redfin.com, cyberhomes.com and zillow. Redfin you have the option of putting in what has sold over the past few months. CW will accept an offer that is fair market. Ours was a bit under but they accepted.
It all depends on how much prices have dropped in the area you are buying. If it’s coastal prices have not dropped too much depending on what city.
A heads-up to all:
Even if you do manage to get your CW short sale approved, be aware that they issue approval letters with verbiage that makes the title likely uninsurable. Specifically, point #10 on their approval states “There are to be no transfers of property within 30 days of the closing of this transaction”.
Most people on here appear to be “retail” buyers and sellers versus Realtors or investors who are flipping property; however, the verbiage still puts a restriction on the title that an informed insurance company won’t insure.
Yes, you may be able to get insurance or may have gotten insurance, but that’s likely because your underwriter didn’t notice or failed to disclose point #10 to the insurer. If you ever need your title insurance, it’s likely not worth the paper it’s written on and the person you’ll have to track down to hold responsible is your underwriter.
Disclsimer: I’m not an attorney. Just some guy involved in short sales. So you don’t have to take my word for anything. But now you’ve been forewarned.
Bottom line: I’d advise complete avoidance of any Countrywide homes.
Thanks Dave,
I just read our approval letter and it’s right there #10
Even after having our offer approved we are still in a nightmare. This is all dealing with the Realtor. Now I am worried about this!
Update: 2 months after submitting the offer and hoping for the best, we were told that the investors decided they actually wanted 450K on a house listed w/ asking price of 270K so they are letting it go to foreclosure. I feel bad for the home owners who have no choice but to deal with these morally bankrupt criminals. At least my wife and I can walk away and move on to something else. I sincerely whish everyone the best of luck and can assure you we will no longer be looking at any short sales.
I am even more confused than ever. I was on the realestate site last night, and noticed that the house we put the bid on is no longer listed. I checked a few other sites, and they all said the house is no longer on the market. I frantically emailed my realtor, who said that she spoke with the listing agent and they said we should have an answer this week. She also said that she checked the site and it said that the house is listed as sale pending. I did not see it anywhere listed as sale pending. What do I believe?
LoganT
Sorry.
This is where you need a talk with your attorney and make sure the phrase is pointed out to your title insurer. Countrywide has recently come up with some alternative wording for #10 if you/someone complains, and thus far, title insurers seem to be accepting that wording. Some, though, think the alternate is still an un-insurable clause/stipulation.
Oh, and make sure your attorney really is knowledgeable about what’s going on with short sales and foreclosures. There’s tons of attorneys out there (and realtors too) working in real estate, but only a few are really up to date.
Again, I’m not an attorney, but I believe the full answer is, “We don’t really know for sure because this is brand new territory that hasn’t been tested yet in the court of law. But such and such is what I think; there are similar transactions occurring nation-wide; most people don’t need their title insurance; and somebody has to be the test-case but odds are that it won’t be you.”
Sorry, Logan, I’m a bit upset with Countrywide.
In your case I’d either: 1. Roll the die and get the house and look at my title insurance as a likely useless piece of paper; or 2. Insist Countrywide completely remove #10 and don’t release your contract on the house so that Countrywide’s only other option is to take the house back in foreclosure. In option 2, thus far, Countrywide forecloses, but if it happens enough times, eventually they’ll have to remove clause #10. Maybe you get to be the lucky first.
Let us know how things go.
HT – try REO’s. Some great deals to be had there — just use a knowledgeable real estate agent. Or, look at short sales that are pre-negotiated. These are often cash investors who have already gotten the bank to accept a number; for all their hard work they’re putting in a bit of a profit; and they’re looking for someone to re-sell it to in a back-to-back closing. (These are the people that Countrywide et al are unwisely and illegitimately targeting.)
Confuzed: often “Pending” sales don’t show up on the level of MLS access that the public has. If your realtor says it’s there, it is there. The sites you access say it’s Not on the Market or don’t show it because it is no longer available. You have it under contract and nobody else can buy it. The MLS that your agent can access will show it as a Pending sale.
Thanks Dave, seems to me that you have been around the shortsale circus for quite sometime. I heard back from the realtor, seems that the bank has unoffically accepted our offer. They have pulled the listing and we are waiting for them to sign the papers. From the postings I have read, the deal often falls through at this point, but I still can’t help getting exciting. It seems that all I do is wait around every week to hear something from CountryWide.
Does anyone have any advice/experience about waiting period for CountryWide to sign papers after they accept an offer??
@ Confused
Countrywide un-offically accepted my offer in May 10, 2009 and the listing on the MLS changed from active to pending release. Now it is June 26, 2009 still waiting on Countrywide to officially sign the papers. As of yet, no indication when they will sign.
Oh no! Guess I shouldn’t start packing.
Question for anyone who has recently had success buying a short sale. Just got word today that CW has sent ss package to Fannie Mae for approval. Does this mean that CW has accepted the sellers ss package and our offer? Thanks.
Congrats BWAT!
@ confuzed
I guess every one is different, we had our offer accepted and then closed within 2 weeks.
Good luck!
Do you think it matters what part of the country you are in? Seems that from most of the bloggs I’ve read, the western part of the country moves much slower with the short sales. I am in the mid-west. Of course, there is not a set in stone pattern, but its just something I’ve noticed.
I’m in Colorado, I think it depends more on the people involved at every level being proactive, from the realtors, seller, title company, to the CW negotiators and staff involved in each individual SS deal.
I agree with you BWAT
We are in San Diego and from the time we put our offer in to acceptance was around 6 weeks. The hold up now has been the horrible job our Realtor is doing. It took him a week after CW accepted our offer to get the purchase agreement in order. It also took a week before he told us the offer was accepted.
Location … Location … Location…!
Lets assume they are 50,000 short sales a month in California being submitted to the Banks and 5,000 short sales being submitted to the banks from the midwest. Who do you think will get their short sale reviewed first?
Second … lets assume California, Las Vegas, Arizona, and Detroit were hit hardest with foreclosure and short sales. Where do you think majority of the long sales … ops short sale are going to come from? Is it going to be from the Midwest?
Third … ask yourself where majority of the people live? California vs Missouri? Las Vegas vs Iowa City? Arizona vs Oklahoma? Detroit vs St Louis?
Fourth … Location … Location … Location …! Why… It is more expensive to live in San Diego than Denver. Trust me. It is more expensive to live in San Francisco than St Louis. Trust me. Is it more expensive to buy a Penthouse in Las Vegas than in Oklahoma city. Trust me. There is a reason why more short-sales and foreclosure are visible in California, Arizona, Las Vegas … etc because it took more to buy something than in Denver.. than in St Louis .. than in Oklahoma City.
Fifth … Yes the individuals involved in the game also plays a role… Realtor, Banks, Listing Agent and you. If the listing agent has never done a short sale … take a wild guess … how long it take you to get the house. If your listing agent in not proactive (2 calls a day to Countrywide) Countrywide could careless.
Just a thought why the process of short sale is faster in some locations than in others.
Hi everyone! I’ve been reading this blog over the past several weeks while our own Countrywide short-sale purchase was creeping along at a slower than slow pace. Yesterday, our offer was accepted by Countrywide…for the second time…and it looks like this will finally be the end of over 5 months of wasted time and money.
To give you an overview of my case, we bid $339,000 (list price plus $10,000 back on closing costs) on a home in the East Bay Area in California on January 26 of this year. On April 10, Countrywide accepted our offer. A week later, we had inspections done and a buyer appraisal. The appraisal came back at $290,000. I was not surprised when Countrywide decided to challenge the appraisal as I, and my realtor, thought the price was low. 2 weeks later, we were told by a Countrywide rep that we should fax in an addendum of our purchase price down to $290,000, as they were likely going to go with that price. This was on April 28.
Six weeks later, after hearing nothing and watching interest rates soar to a full percent higher, we found out that they did do a second appraisal and a backgroud check on my wife and I. We were told that a backgroud check was to make sure we weren’t related to the current owners (for fraud reasons) because the loan value loss was in excess of $300,000 ($360,000 to be exact). At that point, we were given the ol’ “7-10 days” for investor review/approval. Taking advice from previous posters here, I sent an e-mail to Mr. Ken Lewis, CEO of Bank of America. 4 business days later, I got an e-mail from someone in the Office of the Chair. She asked me for the listing agent’s name and phone number. She said once she was given loan information that she would see that the file was escalated in a timely manner. I had been told that our file was being escalated three different times during this process, but not by someone who worked for the CEO. Last Friday, she took the file out of the negotiator’s hand, who was extremely slow with the process, and would have it submitted for rush approval.
Yesterday, we finally got that phone call we’ve been waiting for. I am hoping to hear from my loan agent at anytime and get the go-ahead to put in our 30 day notice at our apartment complex. We should be able to close in about 2 weeks because we’ve had all our paperwork together for the past several months. Our credit file expires in about 3 weeks because it was pulled in late March (B of A gives you 120 days before you have to pull credit again).
So, in closing, if you have a great piece of property, hang in there! We’re going from an 800 sq. ft. apartment to a 2,400 sq. ft. home. Hopefully the listing agent isn’t as crappy as our’s was and if you’re not getting anywhere, fire an e-mail to the CEO. Your file will pick up steam. You don’t have to kiss anyone’s ass in the e-mail but express frustration and understanding that you’re not the only distressed property on the market.
GOOD LUCK!
@ John
I am in the same boat as you are with Countrywide. What is Ken Lewis email address?
ken.d.lewis@bankofamerica.com
Thank You John.
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