Short Sale Home » General Short Sale Info » Doing Short Sales with Lenders

Doing a short sale can vary on experience from lender to lender. Each one will have their own short sale process or time line. Here are a few tips when dealing with these top 3 mortgage lenders.

A typical short sale decision can take 30-60 days from the date the offer is received. Several factors contribute to this time frame:

Countrywide Short Sales

A pending short sale with Countrywide can take quite time and can get messy if you don’t have all your ducks in a row. Some important tips when dealing with Countrywide:

Be prepared and don’t expect the other party to have their stuff together

A lender must have a purchase contract to do underwriting (approved by the seller’s lender).

FHA loans will take much longer to process as they have stricter guidelines

Expect the bank to possibly counter your offer with a higher price. It all depends on how close you are to the actual market value.

Countrywide has a new pre-short sale department that is accepting short sale packages. Now Countrywide will order the BPO ahead of the short sale offer.

Short sales with Countrywide have been known to be canceled in a moment’s notice. Make sure your agent is in constant contact with them to get a status on your offer.

Countrywide is aggressively trying to do loan modifications on defaulted loans. Make sure that your short sale is an active one and double-check to see if the seller is trying to do a loan modification to save you from wasting time.

If your agent is having problems with Countrywide, have them speak with the supervisor if the account manager doesn’t seem to know what they’re doing.

Countrywide now has Phase I and II negotiators. Keep track of who you are working with.

A new short sale policy has been added to Countrywide – They will not conduct short sales on any investment properties. Push to talk to the right person.

Wells Fargo Short Sales

Be prepared that after the short sale package is delivered, you may not get an immediate response. Make sure to follow up with phone calls. It can take up to 4 weeks.

If you or your agent disagrees with Wells Fargo’s appraised amount, request a copy of the appraisal or ask to see comps. Do everything you can to get a copy of the BPO.

It can take about 3 to 4 weeks to get an assigned negotiator. Add on an appraisal order and it can take another 3 weeks to move forward.

The short sale process can move very quickly after the sale amount is agreed upon by both parties.

Get written confirmations of the deal that the lender offers verbally by either email or fax.

A Well Fargo Short Sale can take 60 to 90 days. The staff is backlogged.

Washington Mutual (WaMu) Short Sales

WaMu will take their time in getting back to your short sale package. Sometimes as long as 4 to 6 weeks.

Completion of a short sale can take 6 months on average

If the BPO is ordered, things will move quickly

Plan for delays and be patient

Overall Short Sale Process

A short sale will not be approved until an offer is received. A short sale approval or rejection can take 30 to 60 days from the date it is offered.

Day 1 – A short sale offer is submitted to the short sale lender, including the short sale package: hardship letter, MLS listing, preliminary HUD-1 from the title company, signed purchase agreement, listing agreement
Day 2 to 30 – An Appraisal/BPO is ordered
Day 31 to 45 – Negotiations begin, if any, between the seller’s lender and the buyer. Insurers (FHA, VA, MI companies) and investors like Fannie Mae and Freddie Mac will need to approve the short sale before it can go forward. Any other lenders on the property have to agree to accept an agreed payoff amount to release the lien.
Day 46-51 – Approve or Decline the offer.
Day 52-82 – Proceed with the sale until closing

Tags: fha loans, investment properties, loan modification, purchase contract, time line