Wells Fargo to Agents: Pre-Check Short Sale Buyer Financing
One of the biggest reason short sales fall through, according to JK Huey, a vice president at Wells Fargo (WFC), is that real estate agents do not regularly pre-check buyer access to finances. Instead, agents assume buyers can get the money, but often this isn't the case, she said, speaking at the Texas Mortgage Bankers Association servicing conference being held today in Grapevine, TX. "We want to encourage clients to obtain a credit-check before," Huey said, adding that the lender is looking to streamline the short sale process to "around 30 days." This would include satisfying any second liens, investor concerns and other mitigating circumstances, such as accurately valuating the property. "We get some low-ball offers," that also slow down the process, she said. Wells Fargo is willing to put distressed borrowers through their own short sale process, in cases where they don't qualify for HAFA. In this case, the servicer will still need a promissory note for investors, mortgage insurance companies and junior-lien holders that shows financial obligation to these firms are met. Wells, recently gave a general commitment for second lien write-downs, along with the other top three mortgage servicers in the country. "We are committed to do all we can to get the customer through their disruption and keep them in their homes, but our commitment is to partner with you to help these customers transition smoothly," Huey added. Huey's comments were well-received by the audience, though in the question and answer session, one audience member asked for clarification on the timeline. "In reality we are waiting months," said the attendee. "I think it's popular Realtor opinion that this [bank] department doesn't talk to that [bank] department. We had four short sale offers and three went to foreclosure." Huey responded that there are many pieces to HAFA short sales. And generally if a home is closer to foreclosure it will make sense to go ahead and foreclose. A property must not only be owner-occupied but also not be close to foreclosure, in order to qualify for HAFA, which adds another layer to the process. Write to Jacob Gaffney. Disclosure: the author holds no relevant investment positions.