Short Sales: Lenders to Avoid

As you process leads, keep an eye out for loans with the following companies and avoid them:

Popular Mortgage, Suntrust, ASC, CIT Group, Option 1 and OCWEN are all lenders that are extremely difficult to work. They are unorganized, understaffed and their employees are under trained. Many of these companies use a “team approach” to loss mitigation. When I call these lenders I routinely get stuck on hold for 30 minutes and always get cut off when my call is transferred. When someone does finally answer the phone they have no clue what’s going on with the deal because no one in particular has been assigned to it. These companies are inefficient and ineffective.

Be aware that HSBC and Wilshire historically always pursued deficiency judgments against homeowners; however, lately these lenders have forgone this practice and have approved short sale offers without asking for a deficiency.

Countrywide is a huge lender and is one of the most organized loan servicer we have worked with over the years. They service loans for Freddie Mac, Fannie Mae, FHA and the Veterans Affairs (VA). They also service their own loans. Countryside typically requires 30 days just to get a file set up in their system. Once a BPO is done they require another 30 days to review the BPO and the offer. They also need to have a file 21 days before the auction to examine the file and potentially postpone the foreclosure sale.

Chase needs 30 days, as does Wells Fargo to postpone auctions. Chase is one of our favorite lenders to work with because we find them honest and diligent. Chase will return phone calls! We have had much success with Chase in getting deals done and getting them done fast.

Ameriquest (AMC) is another decent loan servicer to work. They also seem to work quickly and more efficiently than most lenders. We have had much success with them as well.

CitiFinancial / CitiMortgage is another company whom we like. These are two separate companies and short sales are handled by completely separate offices. Citi can be inconsistent with their approval methods. For example, sometimes their loans, especially the 2nd mortgages, are serviced out of their local branch offices that are usually located in strip centers. The people who service these loans in the local branches are usually young loan officers. These twenty-somethings usually do not understand the process of short sales. If you come across one of them see if you can get the file assigned to a senior manager or have the file transferred to one of their large loss mitigation offices. You’ll have much more success working with a more senior loan representative or mitigator.

Citi is also inconsistent with their approvals. Sometimes they’ll try to pursue deficiency judgments and sometimes they will not. Make sure you ask them for a “settlement in full” and not for a “release of lien.”

What lenders have you had success with? Which ones would you recommend avoiding?



to the list

Major PITA

Wachovia has been pretty good so far on the 2 loans I shorted with them. I think they are not as “swamped” as other lenders because they didn’t do as many subprime loans.

Great post! Two questions: What general price range are the houses that you’ve had successful shortsales?

What kind of discounts on the ARV have you been getting on the shortsales? In my market, 65% of ARV or below is excellent particularly for houses <$200K.

So far EMC is #1 for me - they work rather quickly but I would have to say they have too many people involved in the transaction. I got 2 short sales approved within 2 weeks. :shocked

I have yet to deal with Litton and Saxon - which are next on my list of files to deal with. Anyone have experience with those two?

I am just about to start a short sale with Saxon but I have done 1 with Litton, about to start my 2nd and they were a pleasure the first time.

Good Luck!

I had a bad experience with EMC, but my situation may have been unique. The Seller owed $30K in taxes. My offer wanted them to pay the taxes. EMC wanted me to pay the taxes. That would have made the house the most expensive in the neighborhood before doing the cosmetics.

So I said no thanks.

I also had a bad experience with Litton loan. They wanted too high of a price for a property that had high voltage power poles in the back yard. I provided them documentation showing that the City bought an adjacent house that also had power poles in the yard. I told them that I could not pay what they wanted, knowing that information. Litton said no thanks & so did I…

I just closed a ss with Saxon. I worked with 3 different LMs from beginning to end. The last one was the most knowledgeable, but still they asked for some wacko stuff. Seller was RE investor that was foreclosing on multiple properties, so Saxon wanted info on ALL the other properties (default notices, payoffs, rental agreements, etc.). Pain in the &$$!!

Still, it closed eventually. The file folder is 3 inches thick.

You mention Wells Fargo and Chase needs 30 days to postpone an auction…I have a possible SS but the loan is through Wells Fargo and there is only about 10-15 days before auction (May 6th). Does this mean it’s to late to get the auction postponed?

I just postponed an auction with Wells Fargo with less than 48 hours before hand.

Ok thanks for the reply! What did the bank want to see from the seller to postpone? Just the Right of Authorization and P&S agreement?

It all depends it seems. Case by case. They say they need 30 days but sometimes they’ll accept a request within a few days before the auction. I never listen to the time frames they request, I just ask.
Most of my files are ugly so I just use the uglyness as amo.

Sometimes you can contact the Trustee and ask them to postpone the auction. Let them know there has been an offer in place for so many days and the lender has been non-responsive - what can they do to help postpone the auction.

Ok thanks. All I can do is try.

I have to agree. I am doing a short sale with Ocwen, and I have to agree, they are unorganized. They have to many people involved. My first offer along with the complete short sale package was faxed 4/4/08. I just received there counter offer 2 days ago. I know on face value, thats not bad timing on there part, but I have to tell you that in that time frame I spoke with at least 10 differant people and had to fax the offer 4 times to 4 differant numbers. Its making me nuts!

good discussino boys. This are one of the topics it is good to see many participate in. Hopefully we will see this on other topics as well and really help everyone out.

Have a great day

Option One is horrrrible. Its possible, but there not the brightest cryan in the box

I saw your posting that Option One was difficult to deal with, I am working on my first short sale, and Option One is the lender on both the first and 2nd. The payoff on the first (dated 3/17/08) is $275,000 and on the 2nd is $69,000, comps (recently sold, received from the appraiser…$131,500, $169,000, $178,500, $191,000, and $210,000 )

Any suggestions/tips on what I should do to get this done? (last payment made was November…we are in CA)