It is no secret that Fannie Mae and Freddie Mac are tightening the reins on delinquent borrowers. What is looks like to me is Fannie is now going WAY out of their way to “find errors” and “mistakes” so they can can shove the foreclosure back on the originating bank and not have the loss belong to them. FNMA has a long history of when making loads of money any profits belong to them (for their ultra-bright management) and the stockholders. When they lose money – well yes, that’s on the taxpayers.
Now industry giant, Wells Fargo had the following sent out:
Subject: !!!URGENT!!! New Procedures Regarding Extension and F/C Sale Dates
Hello,
If you are receiving this email, I currently am working on your short sale file or have worked on your file in the past few months. PLEASE READ THIS WHOLE EMAIL AND FORWARD TO ANY PARTIES WHO MAY BE WORKING ON A SHORT SALE FOR WELLS FARGO.
Due to recent industry changes, we at Wells Fargo will no longer be granting any extensions for short sale close dates or postponing foreclosure/trustee sale dates. If you were issued an extension letter dated 9/14 or earlier, those extension letters will be honored, but no further extensions will be granted. Files must close by expiration date on the original approval letter or they will be removed. If your approval expires 9/15 or 9/16, you will have 48 hours to get me the final HUD for approval and close.
Please let me know if you have any questions! Thank you!
Thank*´¨)
¸.·´¸.·*´¨) ¸.·*¨)
***Please include the loan # and borrower’s name with all correspondence***
(¸.·´ (¸.·´ * YouJessica Hubby–
Loan Adjustor Specialist
Wells Owned/Private Liquidation
Wells Fargo Home Mortgage | 1 Home Campus | MAC X2409-01F
Des Moines, IA 50328
Tel 515-564-3075
jessica.hubby@wellsfargo.com
Nice. They trained the public to see how long they could stay in the house rent-free and now to “fix things” are simply not going to do any further extensions. Yes, this is coming from FNMA (which is 80% of Wells’ loan portfolio) but 20% is theirs – and they will follow lock step in line with Fannie. All the while chanting, “We don’t want foreclosures”. No, they don’t “want them” but will not act in accordance with “not wanting them”.
Wachovia was first, now Wells. In less than 30 days you will see an announcement from B of A saying the same thing. It will be the new standard. They are trying to quickly “retrain the public” on how long they can stay in the house (now 7 months max) without paying. Not a word from Wells about Fannie and what should be occurring.
A year ago I would have said that Well’s was one of the very best banks to do a short sale with and currently they are among the absolute worst. Almost like they took lessons from how Bank of America was running their loss mitigation division six months to a year ago. Not now. B of A has made HUGE improvements and Wells has gone the other way. Why can’t we get a short sale done before foreclosure? Is it the buyer who is tardy with paperwork? Is it the seller who won’t get papers back to us in a timely manner? Nope. It commonly currently takes Wells over 60 days to get back to us.
From where I sit, Fannie’s claim that they want to stop foreclosures and support neighborhoods rings kind of hollow.
Most of us usually judge individuals and companies by how they act. Not by what they say. At least not for long.
Sheila Rasak
September 28, 2010 at 6:45 am
You can better believe I’ll be doing quite a bit of research on this article and its content today. This is scary news to say the least especially if it becomes an industry trend.
Paula Henry
September 28, 2010 at 7:05 am
Russell – I am in the middle of a Wells Fargo short sale and what you say is dead on. We made it through processing fairly quickly, where they countered the price and the buyer accepted. Three weeks later they say the MI company wants a $25,000 promissory note (which, BTW, makes up for their loss). Then it has to go to Fannie Mae.
Throughout the process, they have given 24 and 48 hour deadlines for everything; updated pay stub, additional P/L statements, answer to MI company, etc. You either make the deadline or they are closing the file and the short sale will be denied. (their words)
They are playing hardball at the expense of many homeowners and tax payers. Truth is, if they didn’t take so long to complete the short sale, there would be no need to extend the closing date.
Benjamin Ficker
September 28, 2010 at 1:14 pm
Thanks for posting this. A couple of related videos you should see come from a couple of guys in the Phoenix area (not me) that do a ton of short sale business:
shortsalepowerhour.com/wells-fargo-foreclosure-policy-not-changing/
shortsalepowerhour.com/widespread-wells-panic-wasnt-worthwhile/
Definitely worth watching…
Joe Loomer
September 28, 2010 at 3:58 pm
Russell,
Do you believe this is part of the coming wave of “shadow inventory?” Interesting that extensions – which I assume are granted in one or two month increments – will no longer be granted unless approved by the mid-September deadline. Puts those properties coming on the market in the – oh, shall we say – POST election period?
Navy Chief, Navy Pride
Paula Henry
September 29, 2010 at 6:24 am
Interesting, Joe! You may not be too far off the truth.
Rob McCance
September 28, 2010 at 10:02 pm
Possibly banks have analyzed a couple of years of short sale data and come to the conclusion that they are costing them MORE money than foreclosures.
Every time I do the unofficial math, I can’t see how a SS is better for a Mortgagor.
And it’s certainly a ton sloppier.
Paula Henry
September 29, 2010 at 6:27 am
Rob – No doubt the way some banks work short sales, that the cost is higher. Some banks are very efficient and save themselves the headache of having a vacant home in the winter; busted pipes on a slab, homes stripped of copper, vandalism, etc.
I have become very selective of the short sales I take; even then, I run into a brick wall with some banks.
Wayne Johnson
September 29, 2010 at 8:13 am
I guess it’s just in the nature of banks to get the upper hand on some participant and “dump” on them for the benefit of the bank and its shareholders. I wish I could peel the onion back to get at the real numbers on foreclosure vs short sale-which is usually better for the banks bottom line.
CG
September 29, 2010 at 7:45 pm
I specialize in short sales and handle many files with BofA and Wells. This article is pretty spot on. The banks take months to process our files and then give us 24-48 hrs when they need something. Wells used to be good to work with but they have definitely taken a turn for the worse. My recent deal was Wells which held both the 1st and 2nd mortgage. After 120 days we lost the deal because the 1st would not agree to additional monies the 2nd wanted to take at closing from the buyer. Go figure, last I checked they are the same company. It was so bad and even worse the two negotiators at the bank refused to speak directly to one another. Instead they kept batting us back and forth as their messenger. Mind you each time we relayed a message it was 1-2 weeks to get a response. Absolutely absurd! What people don’t realize is each negotiator works for a separate division of Wells Fargo. If groups within the same company can’t figure out how to work together how can we ever hope to get through this nightmare. We need politicians and people in government that know how to run a business properly. These fundamental business principles need to be applied to the banks and all the other organizations that have gotten totally out of control!! The only hope we have is to VOTE!! Our country is in for a rude awakening if we each don’t do our part to save it. We need people in power that know how to run a succesful company and more importantly will do what is right for the people instead of what makes them the most $$$$$$$$$$
Marc Brodeur
September 29, 2010 at 8:18 pm
Only Russel Shaw with his quotable quotes can have a headline like this…..
I love it!
Lets not sugar coat this right?!
Aaron Catt
October 2, 2010 at 12:44 pm
Very interesting article! I thought I had caught wind of this somewhere, but now I see that it must be a reality. I’ll agree on the BofA comment, they have done better streamlining their process.