Archive for month November, 2009

Going Back to Far Wells?

Wednesday, November 18th, 2009

I just received the most interesting phone call! I need to write this blog while the details are fresh in my mind.

I had a couple of short sales where the second lien is a line-of-credit from a major unnamed lender (go figure…  from the title). In both cases, the first lender was reasonable and responded within an appropriate timeframe with an approval. In both cases, this second lender refused to accept reasonable amounts, or the amounts dictated by the first lender (which in one case was THE SAME LENDER holding both loans). The negotiator from the Line of credit refused, and refused, for several months to try to work with my Seller:  If they were not going to get their significant percentage of the outstanding balance, plus a promissory note, they were not going to release the lien. There is no room for negotiation. There is no flexibility in these guidelines.

It became clear that this lender was simply not going to accept the short sale transactions I was negotiating with them. The sellers reached the point where things could no longer wait, and decided to file bankruptcy.  Both of them.

Now here we are three weeks after our last conversation with this lender. I had stopped calling because the clients had filed bankruptcy. There was no point. So I just get a phone call from the negotiator who has both files asking me for a status on the transactions. “Oh, they have both filed bankruptcy because your organization would not accept to negotiate a short sale in any other way than your guidelines.”

The negotiator asked if there was any way to bring the Short Sale back to the table. “Sorry, no, as I understand it, all the papers have been filed by the Seller with the court.”
The negotiator gushed about how unfortunate this was, that now they had some leeway to work with. Did I have any other clients that she could help me with?  The change in tone and manner was astounding!

I cannot help but wonder…  how many bankruptcies and foreclosures did it take to prompt this phone call?  And, have they really changed their ways?  Are other lenders sounding like they are beginning to see the light?  Please let us know what you are experiencing out there.