I have been doing a lot of short sales with Wells Fargo during the last year and I would like to share with you the latest developments associated with this lender. As every lender is different,I want you to know what to expect when taking on a home owner who has a first and second lien with this particular lender.

Previously, if a homeowner had a first and second with Wells Fargo, the first would only be willing to contribute $3,000 to the payoff of the 2^nd and would NOT allow any other outside parties to contribute, to the 2^nd. Typically, Wells Fargo Home Equity Lines require 10% of the unpaid balance. So you can see how this would pose a problem.

Currently, we are seeing Wells Fargo allowing a 10% contribution to the Wells Fargo Equity Lines. However, 2nds are NOW asking for an additional contribution, typically 1%. This can come from the seller, or REALTORS.  Sometimes this 1% can be negotiated down but it is becoming increasingly more difficult. 

On a more positive note, we have seen that, once a seller based on their financial situation makes a good faith contribution to Wells Fargo ( 1st and 2nd Liens ) , the bank has been one of the more gracious lenders in waiving their right to pursue future deficiency judgements.

(Tip for the week)

When pre qualifying your client I would make sure that they have the three key components that make up a short sale:

-          Change in income

-          True Hardship

-          Insolvency

When the lender is reviewing your client's financials and  their ability to make a small contribution, we want to make sure that whatever the negotiator requests fits within the parameters of your client's financial situation.If we do in fact have a true candidate for a short sale, then it should be reasonable. A small contribution is well worth the release of future liability, wouldn't you agree?

LOTUS REALTY GROUP

PROFESSIONAL SHORT SALE NEGOTIATORS

At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are.....