Why do lenders sell off a loan in the middle of a short sale?

By
Real Estate Broker/Owner with BROKER of Green Realty Properties® - 954-667-7253 BK3175566

Those who follow my blogs know that I do a lot of short sales. One of the worst things is when my Seller gets a letter from their servicer informing them that the loan is being sold off, and they must now contact this other company to do their short sale. For some reason, this always happens to my sweetest Sellers who are struggling really hard to keep current with the payments while they do the short sale. We're dealing with this situation on one of my short sales, and I just want to knock my head into a wall over and over again. But I've made it a mantra lately that I cannot stress out over things I cannot control, so I'll keep telling myself that. So here's my story...

I have the nicest Seller in the world who is getting a divorce and had to move out of the state for work. She's been renting out her apartment in the meantime, but the lease is up at the end of September. She's been carrying extra costs all along since her rent doesn't cover the entire mortgage, and she'd like very much to keep current until the short sale closes. As you can imagine, this is pretty hard when you have a mortgage and rent that you have to pay every month (along with all other expenses).

We collected all her short sale documents for Bank of America and sent everything in at the beginning of August. We were assigned a negotiator, had an appraisal done, and were moving along swimmingly. Then over this past weekend, she received a letter from BoA letting her know that the loan is being sold to Select Portfolio Servicing, and that starting September 1st, her payments go to them. So now all this paperwork that was done for BoA and all the processing that has already happened was all for no reason. She called the new servicer and they told her that they don't get the loan turned over to them until September 1st, and to not call back until Sept 17th to find out what short sale documents they need, etc because that's how long it'll take for them to fully turn over the loan. Of course I'm going to have her start calling on September 1st anyways, but sometimes I just want to call them and scream, "COME ON! SERIOUSLY?!"

On a brighter note, at least they didn't wait to do this until after we had the short sale approval and were days away from closing...because that has also happened to me. Gotta love short sales!

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If you or anyone you know need help Selling or Buying a Home in Broward & Miami-Dade Counties, please don't hesitate to call me at 954.667.7253

 

Help lots of people and have a great day!

Patty Da Silva, CDPE©, RESS®, AHWD®, e-PRO®, GREEN, CFS, TRC, RSPS

BROKER - REALTOR® Serving South Florida ::: 954. 667. SALE (7253) ::: Green Realty Properties®

Visit www.WeLoveSouthFlorida.com for SouthEast Florida's best properties.

 

 

Copyright © 2008 - 2014 By Patty Da Silva, CDPE©. All Rights Reserved.

Legal Stuff: This article (Contents) reflects the opinion of the author and it is not to be considered legal advice. The author is not an attorney or a CPA. If you are in need of legal or tax advice, it is recommended that you to contact a trusted professional advisor.

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Topic:
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Rainmaker
881,459
Jane Peters
Connecting you to the L.A. real estate scene
Power Brokers Int'l

I can only imagine how frustrating that must be.  You would think there would be a way to stop a lender from transferring the loan in the middle.

September 05, 2012 12:35 PM
Rainmaker
672,700
Gene Mundt
Mortgage Lender - Chicago/Chicagoland Mortgages
www.genemundt.com

Patty:  You are assuming therre IS a valid reason, other than the bank's own.  The decision was made based upon dollars and cents for the bank's purpose.  Nothing else is taken into consideration.  Fairly cut and dry.  I agree with Jane above.  Wish there was a way to talk common sense to them, but we won't hold our breath ...

Gene

 

September 05, 2012 12:43 PM
Rainmaker
565,141
Kathy Sheehan
Branch Manager
Movement Mortgage 770-634-4021

Banks will frequently bundle the loans and sell them off.  Nothing personal about it, but I do understand your frustration.

September 05, 2012 04:41 PM
Rainmaker
442,105
Patty Da Silva, Davie, Southwest Ranches Cooper City, Plantation, Weston, REALTOR
Top Listing Broker
BROKER of Green Realty Properties® - 954-667-7253

Jane, it sure is. I know! They work on the file too so I can't imagine how much waste there is or man power and resources to get these processed only to sell them off.

Gene, I know that's how they work, but it just drives me nuts.

Kathy, oh I know it's not personal, but it is frustrating on our end, and I can imagine on the negotiator or processor's end too.

September 06, 2012 06:59 AM
Anonymous #5
Anonymous
Andrey

I'm on the other end (buyer) of this situation. We had short sale approval on the 1st loan from BofA and just received approval on the 2nd loan. Now BofA decides to transfer the loan, giving me less then 2 weeks to close, or just restart the short sale approval with the new servicer and extend my wait even more, it's been 4 months already.

September 28, 2012 08:45 AM
Rainmaker
442,105
Patty Da Silva, Davie, Southwest Ranches Cooper City, Plantation, Weston, REALTOR
Top Listing Broker
BROKER of Green Realty Properties® - 954-667-7253

Andrey, it's SO frustrating. I'm so sorry you're going through this too. I hope you have a patient and understanding buyer.

September 28, 2012 10:37 AM
Rainmaker
387,682
Elva Branson-Lee
CDPE - Atlanta Real Estate & Short Sale Agent
Solid Source Realty GA

Patty, I share your frustration. Most short sales specialists would, having suffered this indignity on occasion -- and it does stink.

It helps our frustration to rage against the banks for a minute,and I thank you for this post. It expresses my feelings, too.

And then what?  We get right back in  the ring, figuring out how to work with the new guys, keep everyone in the deal and push for a successful closing, don't we? Our line of work is not for the faint of heart.

October 02, 2012 02:39 PM
Rainmaker
442,105
Patty Da Silva, Davie, Southwest Ranches Cooper City, Plantation, Weston, REALTOR
Top Listing Broker
BROKER of Green Realty Properties® - 954-667-7253

Elva, precisely! That's so funny...I just commented on your other comment and said that this work isn't for the faint of heart! Must be true!

October 02, 2012 03:23 PM
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Rainmaker
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Patty Da Silva, Davie, Southwest Ranches Cooper City, Plantation, Weston, REALTOR

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