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!) They have now been taking over by Bank of America Mortgage.
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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Congrats Jag!
When did you recieve verbal acceptance? When will you close? What is the process you have to complete now?
@ Frustrated Firefighter
I never received verbal acceptance. Seller’s agent received phone call and faxed letter of approval and the original is in mail. Anticipated closing date September 18, 2009. As for what process remains (a) final walk through the house (b) document signing (c) picking up the keys.
@ Jag:
CONGRATS! We also got word of approval today! The negotiator emailed seller’s agent stating that the sale has been approved and provided a list of fees approved. She advised to fax a new HUD-1 (not back to her) with approved charges and stated written approval will arrive via email within 7-10 days. We then have 30 days to close after receipt of written approval.
Congrats to both of you, Jag and Honiee. I am encouraged by your good news.
Did you receive any counter offer or the bank approved your orginal offer? What State are you in?
@ KuKu:
Bank rejected our first offer – we then increased it by $10K. The bank counter offered by an additional $10K and we accepted. We are in NJ. Good Luck!
I received NO counteroffer. Submitted offer for $320,000 back on March 14,2009 and they accept $320,000 without counter offers. I am in Northern California.
Honiee – how long did the process take for you. We’re also located in NJ and would like to take advantage of the $8k for first time home buyers through a short sale we just found.
How far below the asking price did you offer? We want to try and just get accepted and make this as fast as possible so any advice would be WONDERFUL!
Congrats “Jag” Im happy for you. What I was talking about that you were confused on was that Im under contract on the home that Im trying to purchase. I’ve been under contract for 10 weeks now but Im still waiting for the banks approval on this sale. The sellers agreed to the price that Im willing to pay on the house, now Im waiting for BoA to approve it . A third party(quantum realestate solutions) is taking care of the short sale process and we are now on the third phase. My real estate agent said, that everything looks good and that we are waiting for the negotiators on this last phase. He also said that we can probably close by mid Oct.
Does anyone know how much longer it will be after the third phase? What are the negotiator negotiating!!! Very frustrated.
Thanks, Jag & Honiee. All the best.
@ Tire of Waiting
It sounds like you are not in phase 3. Phase 3 is the closing phase after the bank has approved the offer. It sounds to me that you are just beginning this process. I submitted my offer on March 7 and the seller accepted the offer within 1-2 weeks after that. It then had to go to countrywide for the approval process and that is where the wait comes in. There are three phases but i dont know if yours will be the same due to the third party. Jag might have a better idea. From where i sit, it looks like you have a ways to go.
@ Kate
It would be a pretty safe bet that any offers that are being submitted now to countrywide or BOA will NOT close before the Dec 1 deadline for the incentive. Other short sales from other companies may have a beeter chance but Countrywide is so backed up that it is very unlikely you will close fast.
As for others that have been approved, the process doesnt speed up at all. I was approved Sept 1 and was given the timeline of 2-5 days of the paperwork coming back to me. I still have not received the paperwork. Obviously it has been two weeks and another broken promise from countrywide.
Keep me updated on if you receive paperwork for execution and get a closeing date.
Dear Bloggers:
It literally took exactly 6 months to the date (march 14 till September 14) to get an approval. This is the trend for California. Not sure other parts of the Country. Honiee will be better to gauge for those in east coast.
Having said that … during our ordeal like most of you we looked at other homes and put offers on other properties, were upset why did we ever saw the house we fell in love with, fought with our agents, with spouse and Ken Lewis. You name it and chances are we are probably going through the same headaches.
It did us no good to get mad. It does good to put pressure on the negotiator. True patient is a virtue but even that got cold and old. But stay in their my flew Countrywide defectors. It will work. It will work. It will work. It will work for you. And when it does the past 6 months will seem meaningless.
@ Kate:
Our offer situation was a bit complex ~
When we viewed the home in Feb 2009 and it was listed as a regular sale (not short sale) for $375K with a note stating “seller extremely motivated, present all offers”. So we went in with an offer of $305K. We got a call from the seller’s agent stating the seller cannot go below $350K without the sale becoming a short sale. So we agreed to proceed and the seller submitted our $305K offer to the bank as a short sale. Bank came back with rejection of $305K in March 2009. We then resubmitted for $315K with home inspection documents to show various problems found to justify our offer price (comps in the area are going for $340K+). Bank counter offered for $325K in August 2009, and we accepted. A lil over a month after we accepted the counter offer the seller’s agent got an email from the negotiator stating the sale has been approved and the formal approval letter will be emailed in 7-10 business days, in which we will have 30 days to close after receipt of the letter. I’m hoping to have the letter by end of next week, or worst case, end of this month so we can close in October.
If you just found the short sale, I don’t think you’ll make the November deadline for the $8K first time home buyers credit. It took us almost 8 months to get to approval – and we don’t even have the formal approval letter in hand yet.
I think a good way to “guess-timate” a price the bank will accept without counter offer would be to get an idea of what comperable homes in the area are selling for and offer something close to it. The bank is trying to get as close to fair market value for short sales so unless you’re willing to pay for your own appraisal, it’s hard to figure out what the bank will consider as “fair market value” based on the bank’s BPO (appraisal). In our case, we did the home inspection shortly after our initial $305K offer so when we resubmitted our offer of $315K (still lower than comps in the area) we submitted the inspection report as justification for the offer since we’re agreeing to buy the house in “as-is” condition. And we ended up approved for $325K.
I hope this helps a lil. Good Luck!
GUESS WHAT PEOPLE!!!! I GOT MY HOUSE, I WAS TOLD TODAY. THEY HAVENT TOLD ME A CLOSING DATE BUT THEY SAID IT WILL BE APPROXIMATELTY THE FIRST WEEK OF OCT. HURRAY.
@ JAG AND FRUSTRATED FIREFIGHTER, I TOLD YOU I WAS IN PHASE THREE FINALLY, IT TOOK ME TWO IN A HALF MONTHS TO GET AN ANSWER. GOOD LUCK TO ALL. FRUSTRATED FIREFIGHTER, YOU WILL GET YOUR HOUSE. GOOD PEOPLE, DESERVE GOOD THINGS AND YOU WILL GET YOURS.=)
Gratz!!!!!!!!!!!
@Tied of Waiting
CONGRAD ….! I am so happy for you. You proved us wrong. Your time line was far shorter than ours. Seems like we will be losing alot of bloggers shortly since approvals are coming left and right. Stay connected for our new comers as they will need guidance.
hey guys, thought i’d join the discussion…
we submitted an offer on a CY short sale around a month ago. we got word that “a negotiator was assigned” about 2-3 weeks ago. Not sure if that’s a level 1 or level 2 negotaitor. Since then we haven’t heard anything (not that i’ve expected to). The house originally was set to go to foreclosure on Aug 30th and they got it pushed back to Sep 30th – that’s been the main thing I was worried about. I don’t know if its typical for them to just keep pushing the date back… anyone have any experience w/ that?
We’re not expecting to make the 8k tax credit deadline – we’re just considering that to be an added bonus if it happens, but i’m putting the changes down at 10%.
Hello fellow bloggers from Florida! My wife and I made an offer on a short sale house about three weeks ago. So far we know that the home owners approved our offer and the short sale packet has been submitted to the bank. After days of searching I just found out there are two mortgages. One is with Countrywide and a junior is with America’s Wholesale Lender. I wanted to get an opinion from you all on how long it should take to hear from the bank. I know Countrywide is swamped and I know it could take a while. Oh yeah to make it fun we are wanting to get this $8000.00 tax credit before Dec 1st.
Hey again! So we actually heard a response today – the bank outright rejected our offer. They had apparently ordered a BPO and said our offer was too low. Any suggestions on what to do here? I wish they had countered instead. We may increase our offer by $15-20k to give it one last shot. The only positive thing out of this is that we got our response from them about a month from submitting our offer.
In regards to my comment above – does the sellers agent now have knowledge of what the BPO was and what price the bank would accept? It seemed like all they knew was that it was rejected b/c of a low price, but I’m wondering if they could ask more questions and find that out.
They wont tell the sellers agent the price. Most of these agents are just concerned with trying to get these houses off of their list. With that being said, most sellers agents will try to work with the buyer as much as they can to finalize this deal as it is just as frustrating for them. This is why countrywide wont tell them. It puts them in a bad negotiating position. Our sellers agent tried many times to get the info from the multiple BPO’s that were accomplished. Sorry, i would just say try to get it as close to fair market price as possible.
@ M&M
I am in Northwest Florida and it has taken more than 6 months to get where we are and that is offer approved and waiting for paperwork to get completed. Now i have heard that Countrywide is speeding up on some of the processes but i have not seen this. In my opinion you will not make the cut off and your probably looking at closing between late Dec and Feb if your lucky.
Is there any rule of thumb for how much of a loss banks are usually willing to take? We upped our offer 20k so it’s now slightly above the most recent listing price of the house, but that’s still about 45-50k less than the total loan on the property. How much does the foreclosure process cost the bank?
@ Moose
I have not seen any rule. I believe CW is trying to sell the house as close to market value as possible. The house we are purchasing was originally sold for 235,000 in 2005 when the market was at its high point. It went into a short sale less than three years later and now we got approved at 155,000. As you can see, this is a huge difference in price but our price is what market value is now. This is just my experience. Compare the property with other properties that are for sale or recently sold and it should give you a good idea on the price you should offer.
Received formal approval letter today!!!!
We now have 30 days to close. YAAAAAAAY!
gratz!!!!!!!!
would you guys recommend submitting your own BPO with the offer? anyone know the cost of getting that done? i’ve heard some say that it wouldn’t help bc the bank would want to look at their own… i’ve heard others say that the bank may look at both or even just yours. wondering how long it takes to get a BPO done too , since we want to submit the offer quickly
Seeing many bloggers are getting their shortsale approved lighten my day. Hopefully and I’m praying really hard that our shortsale will get approved soon.
My agent just forwarded me another update from “SR LOAN SRVCS SPECIALIST” at BoA today. According to the email, a second BPO was submitted for the house on 7/13/2009. They said that they’re going to work with that BPO and that my offer may be OK. They’ll let the seller know after they run the analysis. They have ordered current payoffs for the 1st and 2nd. It would take a couple days to receive that, then they can do the analysis.
Does anyone know if BoA SR LOAN SRVCS SPECIALIST is actually an investor or is this person still a negotiator? Any idea which stage I’m in? Should I prepare a loan pre-approve/approve now to speed up the closing process?
@Jag & @Frustrated Firefighter
Is there anything, anything at all I can do at this point to speed up the process?
Do you guys still think I might not make it before the 8k credit cut off date? Is there a chance/slim chance/itsy bitsy bit chance I might make it?
Thanks all and gratz!
HI, IN MY OPINION FROM WHAT YOUR SAYING, IT LOOKS GOOD. I THINK THAT IF BOA WASNT GOING TO ACCEPT YOUR OFFER, THEY WOULDNT SPEND THE MONEY AND DO ANOTHER BPO. IT LOOKS LIKE YOUR IN STAGE 2, ALSO I THINK YOU WILL MAKE THE CUTOFF DATE THATS 9 WEEKS AWAY AND IN 9 WEEKS A LOT CAN HAPPEN. GOOD LUCK
@WorriedVetWife:
Our BOA Level 2 Negotiator’s title was “SR LOAN SRVCS SPECIALIST”. I would recommend getting the ball rolling on your mortgage. We had our application and all supporting documentation submitted to the underwritter with our offer price when we were in Level 2. The application was placed on hold and revised with our final negotiated price for processing. Best of Luck!
The sellers agent can’t seem to get the 1st negotiator to respond (by email or phone). The way we found our our 1st offer was rejected was just through a generic call center and file status lookup. Any suggestions here? B/c apparently our new and improved offer is just going back to the same negotiator , so that has me a bit worried.
We final received a response after 10 weeks and the appraisal was done the next week. Does anyone know how long after that folks have waited for another response?
@ Worried Vet Wife
To answer your question it will be a close call. Remember they are so many factors still involved (a) what if they counter offer you then time will be wasted (b) appraisal will take few days for the funding of the loan (c) underwriter needs time to get the documents ready for escrow (d) recording and on and on. I do pray that you close tomorrow morning. But keep in there. I have faith you are close.
@Jag @Honiee @Tired of waiting
Thanks so much for your comments and inputs. They helped a lot. I’m praying everyday that a miracle will happen and offer got approved
Do you have any idea on adding additional buyer to the contract? Say if my offer got approve but my loan fell through. I need to add an additional buyer/co-signer to the loan, what do I need to do? Do I need to start the approval process all over again? Will this give the bank a chance to reject my offer because we changed the contract? The reason I’m asking because I just got layoff, so our income changes. Besides worrying the offer getting approved, I’m also worrying that the loan won’t get approve and I might need to add my mom to the loan.
Thanks again all. Best of luck to everyone.
Add ing a coborrower to the loan should be pretty simple to do with the loan that is currently in process. However, keep in mind that, unless it’s an FHA loan, YOU still have to qualify for the majority of the loan. FHA is the only loan that allows a “non-occupying coborrower” to bear the weight of the total debt. Just an FYI…..I am a 36 year veteran mortgage banker.
There is really NO way to know how long a short sale can take. It depends on the type of loan, who the investor is, if there is a second mortgage (they get a “say so”, too) and if there is mortgage insurance on the loan (they get a “say so”, too). Keep in mind that statistics from the past 12 months show that only 5% of short sales submitted actually go through…..because of the reasons above. Information no one asks, but should, is what kind of mortgage the seller has, does he have a second mortgage and is there mortgage insurance on the loan. Also, keep in mind that, if the bank “accepts” less, there is less tax benefit to them than to just foreclosure, hence another layer as to why short sales are tough to get approved. ALSO, don’t mess with a “go between” negotiator company….deal directly with the bank. It’s a waste of money and it’s a “gimmick”….I’ll bet there are alot of former mortgage brokers that are negotiators now…making money for bad advice.
@CJae
You mentioned about the mortgage insurance company having a sat so. Well it just so happens that is exactly where we are right now. The seller has approved and signed off, the lender has approved and signed off, and now it is with the mortgage insurance company and CW is being optimistic about it getting approved from them and we hope to hear on Monday. Once we do we then have 30 days to close. Now why does this need to go to the mortgage insurance company for approval. This is the only step that confuses me and i just found out about it last week when i signed the addendum so it can be submitted for this last step. C/W said that once this gets back that we’re done. Just curious b/c i never had heard this before. Thanks
I’m no expert, but this is what i’ve heard…
The bank is protected by mortgage insurance (paid by the homeowner) and that protection could mean that they are better off having the loan fall through (by rejecting the short sale) since the insurance protects them up to a certain amount. The net amount they lose could be less that way than if they accept the short sale. Not sure if that’s 100% true or not, but it’s just something I’ve read before.
@ Frustrated Firefighter and Moose:
Frustrated Firefighter … Moose is right. PMI – property mortgage insurance – usually plays a roll in approving the short sale. So let me give an example.
Suppose you have a house and the loan on it is $50. You try to short sale it for $20. The loss to the bank is $30. If the bank foreclose on the property then the PMI company MUST reimburse the bank for $30. However, a short sale is not a foreclosure but a pre-foreclosure. The PMI company is NOT obligated to reimburse the bank for $30. It is at a discretion of the PMI company to cover the bank. If the bank will not be reimbursed for the loss chances are the bank will not approve the short sale.
Thanks for that explanation but one has to think that the PMI company is more willing to accept the short sale offer than letting the property go to foreclosure and risk losing even more money right?
From what the seller’s agent tells us, we are in the third stage, they are waiting to hear back from the investor. Any idea how long that takes.
Anyone have an idea???
If your offer has not been approved then you are either in phase 1 or 2. If you are in Phase 2 then you most likely have at least another two months before you close. Once your offer gets accepted you are looking at anywhere from two weeks to two months to close due to the paperwork needing to get signed, depending on how many people need to sign it.
“Phase 2 negotiator has 30 business dates to review the file. ”
—- our phase 1 negotiator just got done reviewing everything and put it through to phase 2. Even though the timeline says they have 30 days to review the file, how long does it typically take?
Our offer was approved by Countrywide, but now we are faced with a bank that has a second mortgage and they won’t agree to the payoff Countrywide is willing to pay them. Anyone else hear of this? Shouldn’t this be between Countrywide and the other lender? The realtor who represents us as the buyer and the seller is trying to negotiate with the other lender. We began this process in May, it took 5 months for Countrywide to agree to our offer, and request a closing date in 30 days, now this obstacle. This is the most frustrating process I have ever gone through. Any advice ????
Yup, walk away.
That aside, no, it’s the responsibility of you or your agent or the seller or their agent to get the second to take CW’s offer. A very common number these days is $3000 to the second.
You can ask CW to extend, they’ll likely ask you to pay money up front – I’d suggest you don’t. They still may extend.
BTW, make sure your title insurance company is okay with clause #10 in CW’s approval letter — if it’s there.
So after 6 months, my offer on a BofA short sale just got to level 2 and we’ve been told we’ll have an answer in 48 to 72 hours. Is that even possible or are they still stringing us along? As you can tell I really don’t believe anything they tell us at this point. I do have a back-up property where my offer has been accepted and will have to make a decision about whether or not to move forward with the back-up in the next couple of days as well (in order to meet the Nov. 30 deadline).
We were told two weeks ago that we should have a response on our offer by October 16th. It’s October 18th and still no response. I don’t know why they give deadlines and then break them. All I can say is pray hard. Hope you get an answer soon!
BOA has 3 levels so you still have one more to go.
I am in the long process of trying to purchase a short sale. My offer was submitted and accepted by the seller on Jan 29, 2009. The 1st and 2nd mtg is with Countrywide now BofA. Went through phase 1, and I believe phase II. BPO completed (a couple times) interior BPO/Appraisal completed. The MI company has sent their approval on 9/17/09. The seller’s agent contacted BofA for status since now they have filed a Notice of Trustee Sale (auction date set for 1/8/2010). BofA finally told them yet another Negotiator had been assigned. Seller’s agent contacted the MI company who thought this file was set to close on 10/30/09. Now BofA has notes in the file stating it has been sent t0 the Investor for approval on 10/14/09. The agent says that investor is Freddie Mac and they have 10-14 days to respond. I have not had any counter-offer as yet. I’m trying to figure out how much longer before we can get this deal done….I’ve waited 10months…If I could have purchased another home I would have (3 offers submitted and I’ve been outbid on all three). Anyone have some suggestions or any idea how much longer this process takes? Am I in the final phase of this thing or what? Please advise… Thanks
For those who have been through a successful short sale process …
After the bank approves an offer, how quickly do they send a letter/contract showing their approval and the closing date, etc?
Is there any way to find out when a BPO was done on a short sale house? I’m told the listing agent would be notified. Is that true? Also do most BPO agents enter the home or are they done by a drive by basis?
Question for you – I made an offer on a short sale, BPO has been don and submitted to the lender a couple of weeks ago and they’ve confirmed that they received the BPO. I just received notice that the short sale package has been submitted to a closer for a retail market review and that the listing agent should be hearing from the closer at the bank. Is a closer someone that closes the deal or is it another negotiator to deal with and more hoops to jump thru?
Thanks
Hi, everyone I just have a quick question Im going through the short sale process and my attorney called me and said that the sellers will be ready to close by November 15 but my realtor said he hasnt heard anything about the short sale being approved. So is this my house or not? Am I going to close on the 15?
If the short sale hasn’t been approved then you don’t have any deal yet, simple as that. The sellers could be “ready” to close today for all they care, and you could be “ready” to move in, but unfortunately it’s a multi-step process you have to go through to get it approved first.
Got the unofficial verbal/email approval middle of last week. Was supposed get the formal approval letter in the next 3-5 business days but still nothing. Is it usually the 2nd negotiator who sends this via email? Any trick to getting this sent quicker?
GOT THE LETTER TODAY WOOHOO
@ Moose, way to go! how long did that take, looks like you hit it right getting one that was close to foreclosure.
Our 1st offer was rejected after 2-3 weeks. We upped the offer and that one took about 1.5 months until final approval. The looming foreclosure date wasn’t necessarily all good b/c we kept having to request extensions of the date and that was a bit nerve-wracking and uncertain each time.
HI,
We put an offer on a house at the end of August. We got confirmation back that they recieved all the paperwork 2 weeks later…(it was delayed a little because the listing agent needed to resend the HUD-1) and was even assigned to a level 1 negotiator in early to mid Sept. Now it is the beginning of Nov and they still have not ordered a BPO or an appraisal. I read the BOA site and it stated that it will only be ordered if they think a short sale can actually occur. Now we really love love love this house. We have looked at a ton of others and nothing really compares. We have tried to call the listing agent to put pressure on her and she keeps saying that she is calling a leaving messages, but never has a response. and then goes on to say how bad it is over there ect….Any suggestions? We have already asked to be added to list that can call but they have said no. We offered above the lisitng price, so it is not like it is a low-ball offer. Does anyone have any suggestions or does it look like this house won’t go through because they haven’t even ordered the BPO?
We got a decent offer on our house and have a 2 month rent back. I just don’t know if we should sell if this house will take more than 3 or 4 months……(the pain of moving into a rental until we figure out if we will even get this house) AGHHHHHHH!
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