Sell My Short Sales

Wachovia Corp. is offering its borrowers money for selling their houses short, rather than going into foreclosure. Are the times changing for lenders to get your short sale approved?

Homeowners with Wachovia mortgages who are upside down on their property can get 1 percent of the price of their short sale, with a minimum of $2,500. The incentives only kick in once the deal closes.

In a short sale, borrowers get their lenders’ permission to sell their property for less than they owe in loans.

Last month, short sale transactions made up 37 percent of all home sales in California, and they’re expected to make up a larger part of the market in the next two years, according to an analysis by market research firm Campbell Communications.

Homeowners are often unfamiliar with the concept of a short sale, and the deals have a well-earned reputation for causing heartburn —- often taking months, and months to get approved by lenders. As a result, many homeowners allow themselves to fall into foreclosure, because they want to put this siutation behind them.

Lenders typically say a short sale is quicker and less costly for them than a foreclosure, but Wachovia is being unusually aggressive in converting potential foreclosures into short sales.

The program was originally intended to be temporary, but there’s no fixed end date for it yet. A source in Wachovia’s short sale unit said “the program will definitely run through November, and probably beyond”. The source preferred not to be named for fear of getting fired.

In Southern California, many of Wachovia’s mortgage customers originated their loans with World Savings Bank, which Wachovia took over in 2006. Last year, Wells Fargo & Co. took over Wachovia, but the integration is not complete. While the short sales unit is still operating as Wachovia, the communications are through Wells Fargo.

Depending on the situation, Wachovia may offer a small sum of money generally an amount that can help with moving expenses. In exchange, the former owner agrees to leave the house by a specified date and that the property will be left in a good and clean condition.

Wachovia is promoting the program quietly by inviting real estate agents to seminars run by employees from the bank’s short sale unit. At the moment the only seminars available in California are taking place in the San Francisco Bay Area, but they will be coming to Southern California early next year, the Wachovia source said.

Another key feature for borrowers is that Wachovia’s program leaves them with no lingering mortgage debt. Across the nation, attorneys have reported that the fine print on short-sale contracts from major lenders hold borrowers responsible for the unpaid mortgage balance, and lenders have pursued collections in court after the sale.
Jesus Yinh, heard about the incentives through a professional organization. He called Wachovia, confirmed what he’d heard, and began seeking out Wachovia customers through his real estate association

“It’s a big deal,” he said. “Most people who are short selling don’t have money to get another place. At least they’ll have some money to get a mover or get a rental.”

The cash incentive is only one of several steps Wachovia is taking to promote and streamline short sales. The lender dramatically curtailed the amount of paperwork short sellers must provide to get a sale approved, allowing them to get a short sale closed in as little as 10 days.

Wachovia is planning to shorten that time further by asking real estate agents to alert it to short sale listings so it can order an appraisal before a bid is made. When a bid comes in, Wachovia will know whether it’s in the range of negotiation.

Bernie Germani, a Southern California short sale investor said ” this program has been a blessing to many of his clients he works with to save their home from foreclosure. The extra money is a great to start moving.”

Jeff Coga, a real estate investor in Southern California also said ” His program of helping 90 families in 90 days from foreclosure, will be obtained because of this program from Wachovia.”

Popularity: 30% [?]