important short-sale question...please help - Posted by JR

Posted by Kevin - WA on May 19, 2006 at 24:27:19:

Yes, the above comment is right. They are under no obligation to speak to you. If they feel it is in their best interests, they will usually call you back.

I tried to do a deal with Chase in March, they did not discount $.01. The house is still in pre-foreclosure and they are going to get hammered, they will have to discount after paying all their foreclosure fees and RE agent cost on the REO.

Maybe they will be more receptive to your offer. Your only option is to contact Chase and submit their package. Or BK. Good luck.


important short-sale question…please help - Posted by JR

Posted by JR on May 18, 2006 at 17:19:11:

Ok, here’s the background information. A family member lost their job and couldn’t make their house payments. After 60 days their lender, which I believe was a private lender who had the loan serviced through Litton Loan Services, sent them a NOD and started the foreclosure process. This was in January and I told my family member I’d try to negotiate a short-sale (different last names). Well, after executing the proper legal paperwork and contacting the lender I got the short-sale package. My family member deeded me the property, which I put into a land trust, then I put together the short-sale package including the comparable sales, hardship letter, bank statement showing a negative balance, offer to purchase and a repair estimate from a contractor (hail damage). I faxed all the information as directed by the lender’s short-sale package and called to confirm they’d received it, which the receptionist said they did. The completed package was submitted in mid-March due to a few hang-ups that cost us time.

Fast forward to yesterday. After waiting to be contacted by the lender as they directed, my family member got a letter notifying them of a sheriff’s sale for June 21, 2006, which was from Chase Financial (not her lender) who apparently bought out the note. This happened after I did not get a reply from the lender even though I did make several attempts over the last two months trying to get ahold of the rep who was handling the account, but they have a receptionist who screens all the calls and sent me straight to this lady’s voicemail. She did not answer her phone, or return the call even once (she faxed me the short-sale package because I left my fax number on her voicemail). I even tried to get a direct extension to her office, but they wouldn’t give me a direct line either. Needless to say, I feel horrible about the situation because I really wanted to help out my family member and now they have this horrible situation that was dropped on them out of the blue and we received no warning from the lender, not even a rejection of the offer.

My question is this, is it customary practice to sell off the note to another lender/company without warning the borrower, or even formally rejecting an offer sent in by another individual who’s working on a short sale? If so, why does this happen and do I have any recourse? Is there any possible way that I can still buy the property from Chase in order to save their credit from a foreclosure/BK? If so, how and what do I do?

Just for the record, they owed $79k on the home, Chase wants to collect $82k at the auction, but I know there’s no way they will get that much. I looked at comps and while there are a few homes in the neighborhood listed for $70-79k, they are exceptionally nice and need no work, but none of them actually sell for that much. The average sold-price is something like $54k and this house needs AT LEAST $15k in work from the hail damage, but needed other repairs before that. Also, the average sold-price for foreclosures in the neighborhood are actually about $35-40k based on comps. Thanks for any feedback!

Re: important short-sale question…please help - Posted by rm

Posted by rm on May 24, 2006 at 06:55:14:

Chase likely bought at a steep discount.

You can probably get a deal done, just contact them and start the process.

It may or may not help to let them know that you had submitted this offer to Litton around the time of the transfer.

The good news is that I’ve had much better experiences with Chase than Litton.

Re: important short-sale question…please help - Posted by John Corey

Posted by John Corey on May 19, 2006 at 20:08:01:


You need to think of this differently. You are asking the lender to sell out their position for less than they are owed. They are under no obligation to even read your offer.

If you want to save the person’s credit you could always help them with the back payments. As the property is upside down that might not make sense economically.

Chase purchased the loan. They might have been buying a portfolio and this one came along for the ride. Do not assume they even knew they were getting it. They might want to deal or they might have some sort of guarantee or insurance. In that case they know they are protected to some level and they will got through the full legal process as that is the only way such a guarantee pays out in some cases.

The lack of logic is mostly because you are not on the other side. There is some way the lender and Chase are thinking about the deal. Maybe it is dumb or maybe it is much better on paper than your offer. With short sales you are throwing stuff against the wall to see what sticks. Most will just fall to the floor.

Note the suggestion about BK does not do much. Going down that route means the person will have a BK and then a foreclosure only it will take longer for everything to hit. This property is upside down and you have not said that the world is going to get much better. A BK even if they later save the house is rather negative to ones credit so will not achieve much on that front. Maybe the future will be better with a new job. Maybe not bright enough to be worth a BK.

John Corey

Re: important short-sale question…please help - Posted by Max-Va

Posted by Max-Va on May 19, 2006 at 07:38:33:

I have done a few short sales and attempted alot that the same thing happened.
Here is what I learned: Common sense is not a factor used by lenders in determining wheather they respond to a short sale package.
It is hard to understand their reasoning on things. Sometimes it seems they do the worst thing possible in the situtation.
Try to approach Chase but don’t hold your breath. You could always buy at the auction although you won’t be keeping the foreclosure off the sellers credit. You can’t win them all

Re: important short-sale question…please help - Posted by TSSP

Posted by TSSP on May 18, 2006 at 17:29:22:

It’s common for mortgagees to sell their nonperforming stuff… the mortgagee is under no obligation to respond to your proposal. Too bad, if it made financial sense, it could have been a win/win.

Out of curiosity, what had been your offer?

Re: important short-sale question…please help - Posted by JR

Posted by JR on May 29, 2006 at 21:35:24:

Thanks for the help. Do you have the contact information that you used to get ahold of the proper individual at Chase? The letter my client received doesn’t list any contact info at all, so I don’t know where to start and it’s supposed to be sold in about 21 days, so I need to move quickly.